Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that...
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Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Accounts payable Accounts receivable Debit Credit $ 54,100 $ 48,500 Additional paid-in capital Buildings (net) (4-year remaining life) 50,000 130,000 Cash and short-term investments 66,000 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 437,500 109,000 89,000 178,500 358,800 Land Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 Supplies Totals 11,400 $ 891,400 $ 891,400 During 2023, Abernethy reported net income of $126,000 while declaring and paying dividends of $16,000. During 2024, Abernethy reported net income of $174,000 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy's common stock by paying $785,800 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. Required: Prepare the consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Answer is not complete. No Date Accounts 1 December 31, 2023 Common stock-Abernethy Additional paid-in capital-Abernethy Retained earnings Investment in Abernethy 2 December 31, 2023 Goodwill Investment in Abernethy 3 December 31, 2023 Equity in subsidiary earnings Investment in Abernethy 4 December 31, 2023 Investment in Abernethy Dividends declared > > > > Debit 250,000 Credit 50,000 358,800 14,000 658,800 126,000 126,000 16,000 16,000 5 December 31, 2023 No journal entry required 6 December 31, 2024 No journal entry required 7 December 31, 2024 Common stock-Abernethy 250,000 Additional paid-in capital-Abernethy Retained earnings 50,000 Investment in Abernethy 8 December 31, 2024 Goodwill Investment in Abernethy 9 December 31, 2024 Equity in subsidiary earnings Investment in Abernethy 10 December 31, 2024 Investment in Abernethy Dividends declared 11 December 31, 2024 No journal entry required 174,000 174,000 Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Accounts payable Accounts receivable Debit Credit $ 54,100 $ 48,500 Additional paid-in capital Buildings (net) (4-year remaining life) 50,000 130,000 Cash and short-term investments 66,000 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 437,500 109,000 89,000 178,500 358,800 Land Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 Supplies Totals 11,400 $ 891,400 $ 891,400 During 2023, Abernethy reported net income of $126,000 while declaring and paying dividends of $16,000. During 2024, Abernethy reported net income of $174,000 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy's common stock by paying $785,800 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. Required: Prepare the consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Answer is not complete. No Date Accounts 1 December 31, 2023 Common stock-Abernethy Additional paid-in capital-Abernethy Retained earnings Investment in Abernethy 2 December 31, 2023 Goodwill Investment in Abernethy 3 December 31, 2023 Equity in subsidiary earnings Investment in Abernethy 4 December 31, 2023 Investment in Abernethy Dividends declared > > > > Debit 250,000 Credit 50,000 358,800 14,000 658,800 126,000 126,000 16,000 16,000 5 December 31, 2023 No journal entry required 6 December 31, 2024 No journal entry required 7 December 31, 2024 Common stock-Abernethy 250,000 Additional paid-in capital-Abernethy Retained earnings 50,000 Investment in Abernethy 8 December 31, 2024 Goodwill Investment in Abernethy 9 December 31, 2024 Equity in subsidiary earnings Investment in Abernethy 10 December 31, 2024 Investment in Abernethy Dividends declared 11 December 31, 2024 No journal entry required 174,000 174,000
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Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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