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, 2020. As of that date, Abernethy has the following trial balance: Debit Credit

image text in transcribed

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 59,500 $ $ 46,600 50,000 145,000 84,250 250,000 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 12/31/23) Retained earnings, 1/1/20 Supplies Totals 257,500 106,000 129,000 151,000 273,050 15,200 $783,550 $ 783,550 During 2020, Abernethy reported net income of $98,500 while declaring and paying dividends of $12,000. During 2021, Abernethy reported net income of $132,250 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock for $699,850 in cash. As of January 1, 2020, Abernethy's land had a fair value of $141,400, its buildings were valued at $217,400, and its equipment was appraised at $217,500. 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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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_2

Step: 3

blur-text-image_3

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

The Principles And Practice Of Auditing

Authors: George Puttick, Sandra Van Esch

8th Edition

0702156914, 978-0702156915

More Books

Students also viewed these Accounting questions

Question

Write formal proposal requests.

Answered: 1 week ago

Question

Write an effective news release.

Answered: 1 week ago

Question

Identify the different types of proposals.

Answered: 1 week ago