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Chapman Company obtains 100 percent of Abernethy Company's stock on January 1,2020 . As of that date, Abernethy has the following trial balance: During 2020,
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1,2020 . As of that date, Abernethy has the following trial balance: During 2020, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2021, 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 $733,100 in cash. As of January 1,2020, Abernethy's land had a fair value of $101,000, its buildings were valued at $242,000, and its equipment was appraised at $279,500. 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 a transaction/event, select "No journal entry required" in the first account field.) Consolidation Worksheet Entries 34567812 Prepare entry *C to convert parent's beginning retained earnings to full accrual basis. Note: Enter debits before credits. Consolidation Worksheet Entries 78 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. Note: Enter debits before credits. Consolidation Worksheet Entries Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. Note: Enter debits before credits. Consolidation Worksheet Entries 812 Prepare entry I to eliminate the income accrual for 2020 less the amortization recorded by the parent using the equity method. Note: Enter debits before credits. Consolidation Worksheet Entries Prepare entry D to eliminate intra-entity dividend transfers. Note: Enter debits before credits. Consolidation Worksheet Entries Prepare entry E to recognize current year amortization expense. Note: Enter debits before credits. Consolidation Worksheet Entries 8 Prepare entry C to convert parent's beginning retained earnings to full accrual basis. Note: Enter debits before credits. Consolidation Worksheet Entries 5 12 Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. Note: Enter debits before credits. Consolidation Worksheet Entries (1) ,5 7 Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021 . Note: Enter debits before credits. Consolidation Worksheet Entries 1 5 7 Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method. Note: Enter debits before credits. Consolidation Worksheet Entries (1) 5 7 8 9 Prepare entry D to eliminate intra-entity dividend transfers. Note: Enter debits before credits. Consolidation Worksheet Entries Prepare entry E to recognize current year amortization expense. Note: Enter debits before credits
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