Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tasks: Prepare entry A to recognize goodwill portion of the original acquisition fair value. Prepare entry I to eliminate intra-entity income accrual for the current

image text in transcribed

Tasks:

Prepare entry A to recognize goodwill portion of the original acquisition fair value.

Prepare entry I to eliminate intra-entity income accrual for the current year based on the parent's usage of the partial equity method

Prepare entry D to eliminate intra-entity dividend transfers

Prepare entry E

Prepare entry *C.

Prepare entry S to eliminate beginning of year stockholders' equity accounts of subsidiarythe retained earnings balance has been adjusted for 2017 income and dividends

Prepare entry A to recognize original goodwill balance

Prepare entry I to eliminate Intra-entity Income accrual for the current year

Prepare entry D to eliminate Intra-entity dividend transfers

Prepare entry E

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 $ 54,200 $ 42,900 50,000 192,000 73,500 250,000 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 12/31/20) Retained earnings, 1/1/17 Supplies Totals 245,000 99,000 128,500 160,000 279,200 12,500 $793,400 $ 793,400 During 2017, Abernethy reported net income of $120,500 while declaring and paying dividends of $15,000. During 2018, Abernethy reported net income of $172,000 while declaring and paying dividends of $40,000. Assume that Chapman Company acquired Abernethy's common stock by paying $771,200 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment. Prepare the 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.)

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

Step: 3

blur-text-image

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

Accounting Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

10th Edition

1119491630, 978-1119491637, 978-0470534793

More Books

Students also viewed these Accounting questions

Question

What are the different types of short sales?

Answered: 1 week ago

Question

2. Outline the functions of nonverbal communication

Answered: 1 week ago