Question
In: Accounting
Peanut Company acquired 90 percent of Snoopy Company’s outstanding common stock for $319,500 on January 1,...
- Peanut Company acquired 90 percent of Snoopy Company’s outstanding common stock for $319,500 on January 1, 2019, when the book value of Snoopy’s net assets was equal to $355,000. Peanut uses the equity method to account for investments. The following trial balance summarizes the financial position and operations for Peanut and Snoopy as of December 31, 2019:
|
Peanut Company |
Snoopy Company |
|||
|
Debit |
Credit |
Debit |
Credit |
|
|
Cash |
255,000 |
75,000 |
||
|
Accounts Receivable |
190,000 |
80,000 |
||
|
Inventory |
180,000 |
100,000 |
||
|
Investment in Snoopy Stock |
364,500 |
0 |
||
|
Land |
200,000 |
100,000 |
||
|
Buildings & Equipment |
700,000 |
200,000 |
||
|
Cost of Goods Sold |
270,000 |
150,000 |
||
|
Depreciation Expense |
50,000 |
10,000 |
||
|
Selling & Administrative Expense |
230,000 |
60,000 |
||
|
Dividends Declared |
225,000 |
30,000 |
||
|
Accumulated Depreciation |
500,000 |
30,000 |
||
|
Accounts Payable |
75,000 |
35,000 |
||
|
Bonds Payable |
150,000 |
85,000 |
||
|
Common Stock |
500,000 |
200,000 |
||
|
Retained Earnings |
517,500 |
155,000 |
||
|
Sales |
850,000 |
300,000 |
||
|
Income from Snoopy |
72,000 |
0 |
||
|
Total |
2,664,500 |
2,664,500 |
805,000 |
805,000 |
- Prepare any equity method journal entry(ies) related to the investment in Snoopy Company during 2019.
- Prepare a consolidation worksheet for 2019 in good form
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Peanut Company acquired 75 percent of Snoopy Company's stock at underlying book value on January 1,...
Peanut Company acquired 75 percent of Snoopy Company's stock at
underlying book value on January 1, 20X8. At that date, the fair
value of the noncontrolling interest was equal to 25 percent of the
book value of Snoopy Company. Snoopy Company reported shares
outstanding of $350,000 and retained earnings of $100,000. During
20X8, Snoopy Company reported net income of $60,000 and paid
dividends of $3,000. In 20X9, Snoopy Company reported net income of
$90,000 and paid dividends of $15,000. The...
Peanut Company acquired 75 percent of Snoopy Company's stock at underlying book value on January 1,...
Peanut Company acquired 75 percent of Snoopy Company's stock at
underlying book value on January 1, 20X8. At that date, the fair
value of the noncontrolling interest was equal to 25 percent of the
book value of Snoopy Company. Snoopy Company reported shares
outstanding of $350,000 and retained earnings of $100,000. During
20X8, Snoopy Company reported net income of $60,000 and paid
dividends of $3,000. In 20X9, Snoopy Company reported net income of
$90,000 and paid dividends of $15,000. The...
On January 1, 20X7, Pepper Company acquired 90 percent of the outstanding common stock of Salt...
On January 1, 20X7, Pepper Company acquired 90 percent of the
outstanding common stock of Salt Corporation for $1,242,000. On
that date, the fair value of noncontrolling interest was equal to
$138,000. The entire differential was related to land held by Salt.
At the date of acquisition, Salt had common stock outstanding of
$520,000, additional paid-in capital of $200,000, and retained
earnings of $540,000. During 20X7, Salt sold inventory to Pepper
for $440,000. The inventory originally cost Salt $360,000. By...
On January 1, 20X7, Pepper Company acquired 90 percent of the outstanding common stock of Salt...
On January 1, 20X7, Pepper Company acquired 90 percent of the
outstanding common stock of Salt Corporation for $1,242,000. On
that date, the fair value of noncontrolling interest was equal to
$138,000. The entire differential was related to land held by Salt.
At the date of acquisition, Salt had common stock outstanding of
$520,000, additional paid-in capital of $200,000, and retained
earnings of $540,000. During 20X7, Salt sold inventory to Pepper
for $440,000. The inventory originally cost Salt $360,000. By...
On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for...
On January 1, 2016, Monica Company acquired 70 percent of Young
Company’s outstanding common stock for $658,000. The fair value of
the noncontrolling interest at the acquisition date was $282,000.
Young reported stockholders’ equity accounts on that date as
follows:
Common stock—$10 par value
$
300,000
Additional paid-in capital
40,000
Retained earnings
460,000
In establishing the acquisition value, Monica appraised Young's
assets and ascertained that the accounting records undervalued a
building (with a five-year remaining life) by $40,000. Any
remaining...
On January 1, 2019, Monica Company acquired 80 percent of Young Company’s outstanding common stock for...
On January 1, 2019, Monica Company acquired 80 percent of Young
Company’s outstanding common stock for $888,000. The fair value of
the noncontrolling interest at the acquisition date was $222,000.
Young reported stockholders’ equity accounts on that date as
follows:
Common stock—$10 par value
$
300,000
Additional paid-in capital
70,000
Retained earnings
630,000
In establishing the acquisition value, Monica appraised Young's
assets and ascertained that the accounting records undervalued a
building (with a five-year remaining life) by $90,000. Any
remaining...
On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for...
On January 1, 2016, Monica Company acquired 70 percent of Young
Company’s outstanding common stock for $700,000. The fair value of
the noncontrolling interest at the acquisition date was $300,000.
Young reported stockholders’ equity accounts on that date as
follows:
Common stock—$10 par value
$
100,000
Additional paid-in capital
100,000
Retained earnings
520,000
In establishing the acquisition value, Monica appraised Young's
assets and ascertained that the accounting records undervalued a
building (with a five-year remaining life) by $40,000. Any
remaining...
On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for...
On January 1, 2016, Monica Company acquired 70 percent of Young
Company’s outstanding common stock for $665,000. The fair value of
the noncontrolling interest at the acquisition date was
$285,000.
Young reported stockholders’ equity accounts on that date as
follows:
Common stock—$10
par value
$
300,000
Additional
paid-in capital
90,000
Retained
earnings
410,000
In establishing the acquisition value, Monica appraised Young's
assets and ascertained that the accounting records undervalued a
building (with a five-year remaining life) by $50,000. Any
remaining...
Pointure Company acquired 80 percent of Souby Company’s outstanding common stock for $664,000 on January 1,...
Pointure Company acquired 80 percent of Souby Company’s
outstanding common stock for $664,000 on January 1, 2019, when the
book value of Souby’s net assets was equal to $830,000. Pointure
uses the equity method to account for investments. Trial Balance
items for Pointure and Souby as of December 31, 2019, are as
follows:
Pointure
Souby
Debit
Credit
Debit
Credit
Cash
125,000
70,000
Accounts Receivable
396,000
90,000
Inventory
450,000
200,000
Investment in Souby
868,000
Plant & Equipment
755,000
585,000
Other Assets...
On January 1, 2016, Monica Company acquired 70 percent of Young Company’s outstanding common stock for...
On January 1, 2016, Monica Company acquired 70 percent of Young
Company’s outstanding common stock for $770,000. The fair value of
the noncontrolling interest at the acquisition date was
$330,000.
Young reported stockholders’ equity accounts on that date as
follows:
Common stock—$10 par value
$
200,000
Additional paid-in capital
60,000
Retained earnings
620,000
In establishing the acquisition value, Monica appraised Young's
assets and ascertained that the accounting records undervalued a
building (with a five-year remaining life) by $80,000. Any
remaining...
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