Accounts payable Accounts receivable Items Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Debit $ 41,000 Credit $ 53,700 50,000 184,000 77,250 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 400,000 117,500 Land Long-term Liabilities (mature 12/31/26) 107,500 Retained earnings, 1/1/23 173,000 417,450 Supplies Totals 16,900 $ 944,150 $ 944,150

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
$ 53,700
$ 41,000
Additional paid-in capital
Buildings (net) (4-year remaining life)
50,000
184,000
Cash and short-term investments
77,250
Common stock
250,000
Equipment (net) (5-year remaining life)
Inventory
400,000
117,500
Land
Long-term liabilities (mature 12/31/26)
Retained earnings, 1/1/23
Supplies
Totals
107,500
173,000
417,450
16,900
$ 944,150 $ 944,150
During 2023, Abernethy reported net income of $98,000 while declaring and paying dividends of $12,000. During 2024, Abern
reported net income of $128,250 while declaring and paying dividends of $39,000.
Assume that Chapman Company acquired Abernethy's common stock by paying $890,450 in cash. All of Abernethy's accounts
estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account
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.
No
Date
1
December 31, 2023 Common stock-Abernethy
Additional paid-in capital-Abernethy
2
Retained earnings
Investment in Abernethy
Answer is not complete.
Accounts
Debit
Credit
× × × ×
3000
250,000
50,000
417,450
717,450
70,400
68,250
21,500
December 31, 2023 Equity in subsidiary earnings
Buildings
Goodwill
Equipment
Transcribed Image Text: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 $ 53,700 $ 41,000 Additional paid-in capital Buildings (net) (4-year remaining life) 50,000 184,000 Cash and short-term investments 77,250 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 400,000 117,500 Land Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 Supplies Totals 107,500 173,000 417,450 16,900 $ 944,150 $ 944,150 During 2023, Abernethy reported net income of $98,000 while declaring and paying dividends of $12,000. During 2024, Abern reported net income of $128,250 while declaring and paying dividends of $39,000. Assume that Chapman Company acquired Abernethy's common stock by paying $890,450 in cash. All of Abernethy's accounts estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account 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. No Date 1 December 31, 2023 Common stock-Abernethy Additional paid-in capital-Abernethy 2 Retained earnings Investment in Abernethy Answer is not complete. Accounts Debit Credit × × × × 3000 250,000 50,000 417,450 717,450 70,400 68,250 21,500 December 31, 2023 Equity in subsidiary earnings Buildings Goodwill Equipment
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