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Im having trouble figure out entries 3 (goodwill), 6,9,12 Chapman Company obtains 100 percent of Abernethy Company's stock on January 1,2020 . As of that
Im having trouble figure out entries 3 (goodwill), 6,9,12
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1,2020 . As of that date, Abernethy has the ollowing trial balance: During 2020 , Abernethy reported net income of $87,000 while declaring and paying dividends of $11,000. During 2021 , Abernethy eported net income of $122,500 while declaring and paying dividends of $55,000. Assume that Chapman Company acquired Abernethy's common stock for $873,250 in cash. As of January 1,2020 , Abernethy's land nad a fair value of $129,800, its buildings were valued at $243,800, and its equipment was appraised at $403,750. 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 Eransaction/event, select "No iournal entry required" in the first account field.) Prepare entry C to convert parent's begnnng retained earnings to full accrual basis. Prepare entry S to eliminate stockholders' equity accounts of subsidiary. Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residua fair value recognized as goodwill. Prepare entry I to eliminate the income accrual for 2020 less the amortization recorded by the parent using the equity method. Prepare entry D to eliminate intra-entity dividend transfers. Prepare entry E to recognize current year amortization expense. Prepare entry C to convert parent's beginning retained earnings to full accrual basis. Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021 . Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021. Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method. Prepare entry D to eliminate intra-entity dividend transfers. Prepare entry E to recognize current year amortizationStep by Step Solution
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