Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2017,

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Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2017, 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, 2017, and December 31, 2018.

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2017. As of that date, Abernethy has the following trial balance:

Assume that Chapman Company acquired Abernethy's common stock for $490,000

During 2017, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2018, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000.

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Fundamentals of Advanced Accounting

ISBN: 978-1259722639

7th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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