Problem 3-19 (Static) (LO 3-3a) 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 $ 50,000 $ 40,000 50,000 120,000 60,000 250,000 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 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020, Abernethy's land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. 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.) view transaction list X 1 Prepare entry *C to convert parent's beginning retained earnings to full accrual basis. 12 > 2 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. full 3 Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. Credit 4 Prepare entry I to eliminate the income accrual for 2020 less the amortization recorded by the parent using the equity method. 5 Prepare entry D to eliminate intra-entity dividend transfers. Note := journal entry has been entered Record entry Clear entry view consolidation entries Problem 3-19 (Static) (LO 3-3a) 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 $ 50,000 $ 40,000 50,000 120,000 60,000 250,000 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 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020, Abernethy's land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. 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.) view transaction list X 6 Prepare entry E to recognize current year amortization expense. 12 > 7 Prepare entry *C to convert parent's beginning retained earnings to full accrual basis. full 8 Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. 9 Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021. Credit 10 Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method. Note := journal entry has been entered Record entry Clear entry view consolidation entries Problem 3-19 (Static) (LO 3-3a) 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 $ 50,000 $ 40,000 50,000 120,000 60,000 250,000 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 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020, Abernethy's land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. 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.) view transaction list X 8 Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. 12 > 9 Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021. full 10 Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method. Credit 11 Prepare entry D to eliminate intra-entity dividend transfers. 12 Prepare entry E to recognize current year amortization expense. Note := journal entry has been entered Record entry Clear entry view consolidation entries Problem 3-19 (Static) (LO 3-3a) 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 $ 50,000 $ 40,000 50,000 120,000 60,000 250,000 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 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020, Abernethy's land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. 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.) view transaction list Consolidation Worksheet Entries Prepare entry *C to convert parent's beginning retained earnings to full accrual basis. Note: Enter debits before credits. . Accounts Debit Credit Date December 31, 2020 Record entry Clear entry view consolidation entries