Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that...
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Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts receivable Accounts payable Additional paid-in capital Credit $ 52,800 $ 49,500 50,000 Buildings (net) (4-year remaining life) 174,000 Cash and short-term investments 84,000 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 315,000 137,500 Land 90,500 Long-term liabilities (mature 12/31/26) 188,500 Retained earnings, 1/1/23 Supplies 323,600 14,400 Totals $ 864,900 $ 864,900 During 2023, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2024, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. Assume that Chapman Company acquired Abernethy's common stock for $731,110 in cash. Assume that the equipment and long-term liabilities had fair values of $338,650 and $156,340, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment. Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts receivable Accounts payable Additional paid-in capital Credit $ 52,800 $ 49,500 50,000 Buildings (net) (4-year remaining life) 174,000 Cash and short-term investments 84,000 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 315,000 137,500 Land 90,500 Long-term liabilities (mature 12/31/26) 188,500 Retained earnings, 1/1/23 Supplies 323,600 14,400 Totals $ 864,900 $ 864,900 During 2023, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2024, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. Assume that Chapman Company acquired Abernethy's common stock for $731,110 in cash. Assume that the equipment and long-term liabilities had fair values of $338,650 and $156,340, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment. Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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Consolidation Worksheet Entries for December 31 2023 1 Elimination of Abernethys Stockholders Equity ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
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