Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2017. As of that date, Abernethy has the following trial balance: Debit Credit
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2017. As of that date, Abernethy has the following trial balance: Debit Credit $ 55,800 $ 42,500 50,000 awarded 209,000 67,250 250,000 cored Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/20) Retained earnings, 1/1/17 Supplies Totals 357,500 136,000 114,000 SA 168,500 414,650 12,700 $938,950 $ 938,950 During 2017, Abernethy reported net income of $104,500 while declaring and paying dividends of $13,000. During 2018, 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 $849,550 in cash. As of January 1, 2017, Abernethy's land had a fair value of $128,300, its buildings were valued at $274,600, and its equipment was appraised at $334,750. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) Visibly Transform a
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started