Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that...
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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 Accounts receivable Accounts payable Additional paid-in capital Buildings (net) (4-year remaining life) $ 52,400 $ 48,600 50,000 179,000 Cash and short-term investments 61,250 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 260,000 121,500 Land 105,000 Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 174,500 264,650 Supplies Totals 16,200 $791,550 $ 791,550 During 2020, Abernethy reported net income of $86,000 while declaring and paying dividends of $11,000. During 2021, Abernethy reported net income of $124,500 while declaring and paying dividends of $47,000. Assume that Chapman Company acquired Abernethy's common stock by paying $752,650 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, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 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 Accounts receivable Accounts payable Additional paid-in capital Buildings (net) (4-year remaining life) $ 52,400 $ 48,600 50,000 179,000 Cash and short-term investments 61,250 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 260,000 121,500 Land 105,000 Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 174,500 264,650 Supplies Totals 16,200 $791,550 $ 791,550 During 2020, Abernethy reported net income of $86,000 while declaring and paying dividends of $11,000. During 2021, Abernethy reported net income of $124,500 while declaring and paying dividends of $47,000. Assume that Chapman Company acquired Abernethy's common stock by paying $752,650 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, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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Consolidation Worksheet Entries December 31 2020 1 To record the acquisition of Abe... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
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