P3-33

a. Record the nvestment in Snoopy Company,

Investment in Snoopy Company $ 270,000
Cash $ 270,000
Book value calculation :
NCI + Peanut Company = Common + Retained
10% 90% Stock Earning
Book value at acquisition : $ 30,000 + 270,000 = 200,000 + 100,000
Basic consoladation entry
Common stock $ 200,000
Retained earnings 100,000
Investment in Snoopy Company $ 270,000
NCI in NA of Snoopy Company 30,000
Optional Accumulated Depreciation Elimination Entry :
Accumulated Depreciation $ 10,000
Buildings and Equipment $ 10,000

b. Consolidation Worksheet

Peanut Snoopy Consolidation Entries Consolidated

Company Company
DR CR

Balance Sheet

Assets

Cash $55,000 20,000 75,000

Account Receivable 50,000 30,000 80,000

Inventory 100,000 60,000 160,000

Investment in Snoopy Stock 270,000 270,000 0

Land 225,000 100,000 325,000

Bilding & Equipment 700,000 200,000 10,000 890,000

Less: Accumulated Depreciation (400,000) (10,000) 10,000 (400,000)

Total Assets $1,000,000 400,000 10,000 280,000 $1,130,000

Liabilities & Stockholders Equity

Account 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

NCI in NA of Snoopy Company 30,000 30,000

Total Liabilities & Equity $1,000,000 400,000 300,000 30,000 $1,150,000

c.

Peanut Company and Subsidiary

Consolidation Balance Sheet

January 1, 20x8

Assets

Cash $ 75,000 Liabilities & Stockholders Equity

Accont Receivable 80,000 Account Payable $ 100,000

Inventory 160,000 Bonds Payable 275,000

Land 325,000 Commong Stock 500,000

Buildings & Equipment 890,000 Retained Earnings 225,000

Less:Accumulated Depreciation (400,000) NCI in NA of Snoopy Company 30,000

Total Assets $1,130,000 Total Liabilities & Equity $1,130,000