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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: During 2023,
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: During 2023, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2024 , Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock for $500,000 in cash. Assume that the equipment and longterm liabilities had fair values of $220,000 and $120,000, 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. \begin{tabular}{|c|c|c|c|c|c|} \hline & & A & & & \\ \hline No & Date & & & Debit & Credit \\ \hline 1 & December 31, 2023 & Common stock - Abernethy & & 250,000 & \\ \hline & & Additional paid-in capital & & 50,000 & \\ \hline & & Retained earnings & & 100,000 & \\ \hline & & Investment in Abernethy & 2 & & 400,000 \\ \hline 2 & December 31, 2023 & Land & & 10,000 & \\ \hline & & Buildings & & 40,000 & \\ \hline & & Goodwill & & 60,000 & \\ \hline & & Equipment & & & 20,000 \\ \hline & & Investment in Abernethy & & & 90,000 \\ \hline 3 & December 31, 2023 & Dividend income & & 10,000 & \\ \hline & & Dividends declared & & & 10,000 \\ \hline 4 & December 31,2023 & Depreciation expense & & 6,000 & \\ \hline & & Equipment & & 4,000 & \\ \hline & & Buildings & & & 10,000 \\ \hline 5 & December 31, 2024 & 4 Investment in Abernethy & & 138,000 & \\ \hline & & Retained earnings & & & 138,000 \\ \hline 6 & December 31, 2024 & 4 Common stock - Abernethy & & 250,000 & \\ \hline & & Additional paid-in capital & & 50,000 & \\ \hline & & Retained earnings & & 170,000 & \\ \hline & & Investment in Abernethy & & & 470,000 \\ \hline 7 & December 31, 2024 & 4 Land & & 10,000 & \\ \hline & & Buildings & & 30,000 & \\ \hline & & Goodwill & & 60,000 & \\ \hline & & Equipment & & & 16,000 \\ \hline & & Investment in Abernethy & & & 84,000 \\ \hline 8 & December 31, 2024 & 4 Dividend income & & 30,000 & \\ \hline & & Dividends declared & & & 30,000 \\ \hline 9 & December 31, 2024 & 4 Depreciation expense & & 6,000 & \\ \hline & & Equipment & & 4,000 & \\ \hline & & Buildings & & & 10,000 \\ \hline \end{tabular}
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