Answer:
Date Description Debit Credit
Jan. 1 Investment in Snoopy 270,000
Cash Account 270,000
To record the 90% investment in Snoopy.
Jan. 1
Cash 20,000
Accounts receivable 30,000
Inventory 60,000
Land 100,000
Building, net 90,000
Goodwill on acquisition 100,000
Investment in Snoopy Company 270,000
Accounts Payable 25,000
Bonds Payable 75,000
Noncontrolling interest 30,000
b. Consolidation Worksheet on January 1, 20X8:
Peanut Snoopy DR CR Consolidated
Company Company
Assets
Cash $55,000 $20,000 $75,000
- Accounts Receivable 50,000 30,000 80,000
Inventory 100,000 60,000 160,000
Investment in Snoopy 270,000 270,000CR
Land 225,000 100,000 325,000
Buildings and Equipment 700,000 100,000 800,000
Accumulated Depreciation (400,000) (10,000) (410,000)
Goodwill 100,000
Total Assets $1,000,000 $400,000 $1,130,000
Liabilities and Stockholders' Equity
Accounts Payable $75,000 $25,000 100,000
Bonds Payable 200,000 75,000 275,000
Common Stock 500,000 200,000 200,000 500,000
Retained Earnings 225,000 100,000 100,000 225,000
Noncontrolling interest 30,000
Total Liabilities and Equity $1,000,000 $400,000 $1,130,000
c. Consolidated Balance Sheet
Assets
Cash $75,000
- Accounts Receivable 80,000
Inventory 160,000
Land 325,000
Buildings and Equipment 800,000
Accumulated Depreciation (410,000)
Goodwill 100,000
Total Assets $1,130,000
Liabilities and Stockholders' Equity
Accounts Payable $100,000
Bonds Payable 275,000
Common Stock 500,000
Retained Earnings 225,000
Noncontrolling interest 30,000
Total Liabilities and Equity $1,130,000
Explanation:
a) Trial balance data for Peanut and Snoopy as of January 1, 20X8, follow:
Peanut Snoopy
Company Company
Assets
Cash $55,000 $20,000
Accounts Receivable 50,000 30,000
Inventory 100,000 60,000
Investment in Snoopy Company 270,000
Land 225,000 100,000
Buildings and Equipment 700,000 100,000
Accumulated Depreciation (400,000) (10,000)
Total Assets $1,000,000 $400,000
Liabilities and 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 and Equity $1,000,000 $400,000
