Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020 As of that date. Abernethy has the following trial balance: Debit Credit $ 54,200 $ 42,900 50,000 192,00 73,500 250,000 Accounts payable Accounts receivable Additional paid in capital Buildings (net) (4-year remaining life) Cash and short-term Investments Common stock Equipment (nat) (5 year remaining life) Inventory Land Lontece libilities (sature 12/31/23) Retained earnings, 1/1/20 Supplies Totals 245,000 99,000 128.500 160,000 279,200 12.500 $793,400 $ 193,400 During 2020. Abernethy reported net income of $120,500 while declaring and paying dividends of $15.000. During 2021. Abernethy reported net income of $172,000 while declaring and paying dividends of $40,000 Assume that Chapman Company acquired Abernethy's common stock for $714.650 in cash As of January 1, 2020, Abernethy's land had a fair value of $139.200, its buildings were valued at $262,000, and its equipment was appraised at $218,000. Chapman uses the equity method for this investment Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for transaction/event, select "No Journal entry required" in the first account field.) Victo Consolidation Worksheet Entries 3 4 12 Prepare antry to convert parent's beginning retained earnings to full entry required in the first account field.) View transaction list EX Prepare entry -C to convert parent's beginning retained eamings to full accrual basis. 12 2. Prepare entry s to eliminate stockholders' equity accounts of subsidiary. bli 3 Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. Credit 4 Prepare entry I to eliminate the income accrual for 2020 less the amortization recorded by the parent using the equity method. 5 Prepare entry D to eliminate intra-entity dividend Note : journal entry has been entered Record entry Clear entry view consolidation entries wheetenues Tor December 20, and December 31, 2024(I no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction ist X equity method. 12 5 Prepare entry D to eliminate intra entity dividend transfers. ull 6 Prepare entry E to recognize current year amortization expense. 7 Prepare entry * to convert parent's beginning retained eamings to full accrual basis. Credit 8 Prepare entry s to eliminate stockholders' equity accounts of subsidiary for 2021. 9 Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021. Note: = Journal entry has been entered Record entry Clear entry view consolidation entries transaction/event, select "No journal entry required" in the first account field.) View transaction list X 8 Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. 12 9 Prepare entry A to recognize allocations attributed to Specific accounts at acquisition date for 2021 / 10 Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method Credit 11 Prepare entry D to eliminate intra-entity dividend transfers. 12 Prepare entry E to recognize current year amortization expense. Note: = journal entry has been entered Record entry Clear entry view consolidation entries Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020 As of that date. Abernethy has the following trial balance: Debit Credit $ 54,200 $ 42,900 50,000 192,00 73,500 250,000 Accounts payable Accounts receivable Additional paid in capital Buildings (net) (4-year remaining life) Cash and short-term Investments Common stock Equipment (nat) (5 year remaining life) Inventory Land Lontece libilities (sature 12/31/23) Retained earnings, 1/1/20 Supplies Totals 245,000 99,000 128.500 160,000 279,200 12.500 $793,400 $ 193,400 During 2020. Abernethy reported net income of $120,500 while declaring and paying dividends of $15.000. During 2021. Abernethy reported net income of $172,000 while declaring and paying dividends of $40,000 Assume that Chapman Company acquired Abernethy's common stock for $714.650 in cash As of January 1, 2020, Abernethy's land had a fair value of $139.200, its buildings were valued at $262,000, and its equipment was appraised at $218,000. Chapman uses the equity method for this investment Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for transaction/event, select "No Journal entry required" in the first account field.) Victo Consolidation Worksheet Entries 3 4 12 Prepare antry to convert parent's beginning retained earnings to full entry required in the first account field.) View transaction list EX Prepare entry -C to convert parent's beginning retained eamings to full accrual basis. 12 2. Prepare entry s to eliminate stockholders' equity accounts of subsidiary. bli 3 Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. Credit 4 Prepare entry I to eliminate the income accrual for 2020 less the amortization recorded by the parent using the equity method. 5 Prepare entry D to eliminate intra-entity dividend Note : journal entry has been entered Record entry Clear entry view consolidation entries wheetenues Tor December 20, and December 31, 2024(I no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction ist X equity method. 12 5 Prepare entry D to eliminate intra entity dividend transfers. ull 6 Prepare entry E to recognize current year amortization expense. 7 Prepare entry * to convert parent's beginning retained eamings to full accrual basis. Credit 8 Prepare entry s to eliminate stockholders' equity accounts of subsidiary for 2021. 9 Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021. Note: = Journal entry has been entered Record entry Clear entry view consolidation entries transaction/event, select "No journal entry required" in the first account field.) View transaction list X 8 Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. 12 9 Prepare entry A to recognize allocations attributed to Specific accounts at acquisition date for 2021 / 10 Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method Credit 11 Prepare entry D to eliminate intra-entity dividend transfers. 12 Prepare entry E to recognize current year amortization expense. Note: = journal entry has been entered Record entry Clear entry view consolidation entries
