Advanced financial accounting 10th edition christensen cottrell baker 1 PDF

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Chapter 2

Reporting Intercorporate Investments and Consolidation of Wholly Owned Subsidiaries with No Differential

Peanut Company Company

Snoopy

Cash Accounts Receivable Inventory Investment in Snoopy Stock Land Buildings & Equipment Cost of Goods Sold Depreciation Expense S&A Expense Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Retained Earnings Sales Income from Snoopy Total

Required a. Prepare the journal entries on Peanut’s books for the acquisition of Snoopy on January 1, 20X8, as well as any normal equity method entry(ies) related to the investment in Snoopy Company during 20X8. b. Prepare a consolidation worksheet for 20X8 in good form.

LO 2-3, 2-6, 2-7 P2-24 Consolidated Worksheet at End of the Second Year of Ownership (Equity Method)

Peanut Company acquired 100 percent of Snoopy Company’s outstanding common stock for $300,000 on January 1, 20X8, when the book value of Snoopy’s net assets was equal to $300,000. Problem 2-23 summarizes the first year of Peanut’s ownership of Snoopy. 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, 20X9:

Peanut Company Company Cash Accounts Receivable Inventory Investment in Snoopy Stock Land Buildings & 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

Snoopy...