24/7 online - 
1-316-444-1378 or 44-141-628-6690
Login
August 12th, 2017 
admin Consolidated Worksheet and Balance Sheet on the Acquisition Date (Equity Method)
Peanut Company acquired 90 percent of Snoopy Company’s outstanding common stock for $270,000 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $300,000.
Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1, 20X8, are as follows:
|
|
Peanut |
Snoopy |
|
|
Company |
Company |
|
Assets |
|
|
|
Cash |
55,000 |
20,000 |
|
Accounts Receivable |
50,000 |
30,000 |
|
Inventory |
100,000 |
60,000 |
|
Investment in Snoopy Stock |
270,000 |
|
|
Land |
225,000 |
100,000 |
|
Buildings & Equipment |
700,000 |
200,000 |
|
Accumulated Depreciation |
(400,000) |
(10,000) |
|
Total Assets |
1,000,000 |
400,000 |
|
Liabilities & Stockholders’ Equity |
|
|
|
Accounts Payable |
75,000 |
25,000 |
|
Bonds Payable |
200,000 |
75,000 |
|
Common Stock |
500,000 |
200,000 |
|
Retained Earnings |
225,000 |
100,000 |
|
Total Liabilities & Equity |
1,000,000 |
400,000 |
Required
a. Prepare the journal entry on Peanut’s books for the acquisition of Snoopy on January 1, 20X8.
b. Prepare a consolidation worksheet on the acquisition date, January 1, 20X8, in good form.
c. Prepare a consolidated balance sheet on the acquisition date, January 1, 20X8, in good form.
Posted in Uncategorized 