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Chapman Company obtains 1 0 0 percent of Abernethy Company s stock on January 1 , 2 0 2 3 . As of that date,
Chapman Company obtains percent of Abernethy Companys stock on January As of that date, Abernethy has the following trial balance:
Items Debit Credit
Accounts payable $
Accounts receivable $
Additional paidin capital
Buildings netyear remaining life
Cash and shortterm investments
Common stock
Equipment netyear remaining life
Inventory
Land
Longterm liabilities mature
Retained earnings,
Supplies
Totals $ $
During Abernethy reported net income of $ while declaring and paying dividends of $ During Abernethy reported net income of $ while declaring and paying dividends of $
Assume that Chapman Company acquired Abernethys common stock by paying $ in cash. All of Abernethys accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment.
Required:
Prepare the consolidation worksheet entries for December and December
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field. Prepare entry S to eliminate stockholders' equity accounts of subsidiary.
Prepare entry A to recognize allocations attributed to specific accounts at acquisition date.
Prepare entry I to eliminate the subsidiary income accrual recognized by the parent.
Prepare entry D to eliminate intraentity dividend transfers.
Prepare entry E to recognize amortization expense.
Prepare entry C to convert parent company figures to equity method.
Prepare entry S to eliminate stockholders' equity accounts of subsidiary for
Prepare entry A to recognize allocations attributed to specific accounts at acquisition date.
Prepare entry I to eliminate the subsidiary income accrual recognized by the parent.
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