Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image

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 $ 55,800 $ 42,500 50,000 Buildings (net) (4-year remaining life) 209,000 Cash and short-term investments 67,250 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 357,500 136,000 Land 114,000 Long-term liabilities (mature 12/31/26) 168,500 Retained earnings, 1/1/23 414,650 Supplies Totals 12,700 $ 938,950 $ 938,950 During 2023, Abernethy reported net income of $104,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $137,750 while declaring and paying dividends of $34,000. Assume that Chapman Company acquired Abernethy's common stock for $819,720 in cash. Assume that the equipment and long-term liabilities had fair values of $378,350 and $137,980, 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Consolidation Worksheet Entries for December 31 2023 Account Debit Credit Investment in Abernethy 81... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni

13th edition

1259444953, 978-1259444951

More Books

Students also viewed these Accounting questions

Question

5. Why are mobile social networks growing so fast?

Answered: 1 week ago