Reference no: EM132908508

Question - Peanut Company acquired 100 percent of Snoopy Company's outstanding common stock for $308,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $308,000. Accumulated depreciation on this date was $16,000. Peanut chooses to carry the investment in Snoopy at cost because the investment will be consolidated. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 20X9:

Peanut Company Snoopy Company

Debit Credit Debit Credit

Cash $237,000 $81,000

Accounts Receivable 201,000 93,000

Inventory 191,000 118,000

Investment in Snoopy Company 308,000 0

Land 214,000 107,000

Buildings & Equipment 706,000 211,000

Cost of Goods Sold 277,000 137,000

Depreciation Expense 56,000 16,000

Selling & Administrative Expense 248,000 76,000

Dividends Declared 233,000 36,000

Accumulated Depreciation $516,000 $48,000

Accounts Payable 70,000 21,000

Bonds Payable 145,000 69,000

Common Stock 498,000 184,000

Retained Earnings 573,000 264,000

Sales 833,000 289,000

Dividend Income 36,000 0

Total $2,671,000 $2,671,000 $875,000 $875,000

Required -

a. Prepare the journal entries related to the investment in Snoopy Company during 20X9.

b. Prepare the consolidation worksheet for 20X9.