Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $279,000 on January 1, 20X8, whe book value of Snoopy's net assets was equal to $310,000. Peanut uses the equity method to account for investments. Trial balar data for Peanut and Snoopy as of December 31, 20X8, follow: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit $ 159,000 177,000 212,000 324,000 324,888 209,000 703,000 191,000 47,000 207,000 97,000 $2,326,000 Credit $ 437,000 72,000 188,000 490,000 275,300 789,000 74,700 $2,326,000 Snoopy Company Debit $ 83,000 67,000 75,000 94,000 195,000 115,000 10,000 39,000 33,000 $711,000 Credit $ 20,000 57,000 77,000 194,000 116,000 247,000 0 $711,000 Required: a. Prepare any equity method entry(ies) related to the investment in Snoopy Company during 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $279,000 on January 1, 20X8, whe book value of Snoopy's net assets was equal to $310,000. Peanut uses the equity method to account for investments. Trial balar data for Peanut and Snoopy as of December 31, 20X8, follow: Cash Accounts Receivable Inventory Investment in Snoopy Company Land Buildings and Equipment Cost of Goods Sold Depreciation Expense Selling & Administrative Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Company Total Peanut Company Debit $ 159,000 177,000 212,000 324,000 324,888 209,000 703,000 191,000 47,000 207,000 97,000 $2,326,000 Credit $ 437,000 72,000 188,000 490,000 275,300 789,000 74,700 $2,326,000 Snoopy Company Debit $ 83,000 67,000 75,000 94,000 195,000 115,000 10,000 39,000 33,000 $711,000 Credit $ 20,000 57,000 77,000 194,000 116,000 247,000 0 $711,000 Required: a. Prepare any equity method entry(ies) related to the investment in Snoopy Company during 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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