Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that...
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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: Items Debit Credit Accounts receivable Accounts payable Additional paid-in capital $ 58,000 $ 40,200 50,000 Buildings (net) (4-year remaining life) 170,000 Cash and short-term investments 66,750 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 372,500 109,500 Land 116,000 Long-term liabilities (mature 12/31/26) 165,000 Retained earnings, 1/1/23 369,150 Supplies Totals 17,200 $ 892,150 $ 892,150 During 2023, Abernethy reported net income of $106,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2023, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the equity method for this 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. 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 Credit Accounts receivable Accounts payable Additional paid-in capital $ 58,000 $ 40,200 50,000 Buildings (net) (4-year remaining life) 170,000 Cash and short-term investments 66,750 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 372,500 109,500 Land 116,000 Long-term liabilities (mature 12/31/26) 165,000 Retained earnings, 1/1/23 369,150 Supplies Totals 17,200 $ 892,150 $ 892,150 During 2023, Abernethy reported net income of $106,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2023, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the equity method for this 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.
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Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
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