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please help me correct them. thank you Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy
please help me correct them. thank you
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 58,900 $ $ 41,500 50,000 211,000 70,750 250,000 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 430,000 139,000 121,500 174,000 498,450 17,600 $1,031,350 $1,031, 350 During 2020, Abernethy reported net income of $120,000 while declaring and paying dividends of $15,000. During 2021, Abernethy reported net income of $170,000 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock for $902,200 in cash. As of January 1, 2020, Abernethy's land had a fair value of $133,000, its buildings were valued at $277,000, and its equipment was appraised at $393,500. 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.) No Date Accounts Debit Credit 1 December 31, 202 No journal entry required 2 December 31, 202 Common stock-Abernethy 250,000 Additional paid-in capital Retained earnings1/1/20 Investment in Abernethy 50,000 498,450 789,450 X 3 December 31, 202 Goodwill 103,750 Investment in Abernethy 103,750 X 4 December 31, 202 Equity in subsidiary earnings 120,000 Investment in Abernethy 120,000 X 5 December 31, 202 Investment in Abernethy 15,000 Dividends declared 15,000 6 December 31, 202 No journal entry required 7 December 31, 202 No journal entry required > 7 December 31, 202 No journal entry required 8 December 31, 202 Common stock-Abernethy 250,000 50,000 Additional paid-in capital Retained earnings1/1/21 Investment in Abernethy 630,450 903,450 9 December 31, 202 Goodwill 103,750 X Investment in Abernethy 103,750 X 10 December 31, 202 Equity in subsidiary earnings 170,000 Investment in Abernethy 170,000 X 11 December 31, 202 Investment in Abernethy 48,000 Dividends declared 48,000 12 December 31, 202 No journal entry required 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 58,900 $ $ 41,500 50,000 211,000 70,750 250,000 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 430,000 139,000 121,500 174,000 498,450 17,600 $1,031,350 $1,031, 350 During 2020, Abernethy reported net income of $120,000 while declaring and paying dividends of $15,000. During 2021, Abernethy reported net income of $170,000 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock for $902,200 in cash. As of January 1, 2020, Abernethy's land had a fair value of $133,000, its buildings were valued at $277,000, and its equipment was appraised at $393,500. 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.) No Date Accounts Debit Credit 1 December 31, 202 No journal entry required 2 December 31, 202 Common stock-Abernethy 250,000 Additional paid-in capital Retained earnings1/1/20 Investment in Abernethy 50,000 498,450 789,450 X 3 December 31, 202 Goodwill 103,750 Investment in Abernethy 103,750 X 4 December 31, 202 Equity in subsidiary earnings 120,000 Investment in Abernethy 120,000 X 5 December 31, 202 Investment in Abernethy 15,000 Dividends declared 15,000 6 December 31, 202 No journal entry required 7 December 31, 202 No journal entry required > 7 December 31, 202 No journal entry required 8 December 31, 202 Common stock-Abernethy 250,000 50,000 Additional paid-in capital Retained earnings1/1/21 Investment in Abernethy 630,450 903,450 9 December 31, 202 Goodwill 103,750 X Investment in Abernethy 103,750 X 10 December 31, 202 Equity in subsidiary earnings 170,000 Investment in Abernethy 170,000 X 11 December 31, 202 Investment in Abernethy 48,000 Dividends declared 48,000 12 December 31, 202 No journal entry requiredStep by Step Solution
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