Question
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
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.)
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