aid-in capital et) (4-year renaining Life) rt-term investments 50, 000 214, 000 82, 250 250, 000 375,000 98, 500 117,000 et) (5-year remaining life) 170, 000 409,650 abilities (mature 12/31/23) inings, 1/1/20 16, 000 $936,950 $ 936,950 bernethy reported net income of $117,500 while declaring and paying divide nmo of $171 250 while declaring and paying dividends of $55,000.
aid-in capital et) (4-year renaining Life) rt-term investments 50, 000 214, 000 82, 250 250, 000 375,000 98, 500 117,000 et) (5-year remaining life) 170, 000 409,650 abilities (mature 12/31/23) inings, 1/1/20 16, 000 $936,950 $ 936,950 bernethy reported net income of $117,500 while declaring and paying divide nmo of $171 250 while declaring and paying dividends of $55,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the
following trial balance:
Credit
$ 57,300
Debit
Accounts payable
Accounts receivable
Additional paid-in capital
Buildings (net) (4-year renaining life)
Cash and short-term investnents
Common stock
Equipment (net) (5-year remaining life)
Inventory
Land
Long-tern liabilities (mature 12/31/23)
Retained earnings, 1/1/20
Supplies
Totals
$ 42,200
50, 000
214, 000
82,250
250,000
375,000
98,500
117,000
170,000
409,650
16, 000
$936,950
$ 936, 950
During 2020, Abernethy reported net income of $117,500 while declaring and paying dividends of $15.000. During 2021, Abernethy
reported net income of $171,250 while declaring and paying dividends of $55,000,
Assume that Chapman Company acquired Abernethy's common stock for $816.280 in cash. Assume that the equipment and long-term
liabilities had fair values of $396,950 and $140,720. respectively, on the acquisition date. Chapman uses the initial value method to
account for its investment.
Prepare 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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F54116caa-f22b-40fd-ac71-cd149350f749%2F79fb183e-4c80-4aa5-872a-50f0e610fb8a%2Ffyav28h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the
following trial balance:
Credit
$ 57,300
Debit
Accounts payable
Accounts receivable
Additional paid-in capital
Buildings (net) (4-year renaining life)
Cash and short-term investnents
Common stock
Equipment (net) (5-year remaining life)
Inventory
Land
Long-tern liabilities (mature 12/31/23)
Retained earnings, 1/1/20
Supplies
Totals
$ 42,200
50, 000
214, 000
82,250
250,000
375,000
98,500
117,000
170,000
409,650
16, 000
$936,950
$ 936, 950
During 2020, Abernethy reported net income of $117,500 while declaring and paying dividends of $15.000. During 2021, Abernethy
reported net income of $171,250 while declaring and paying dividends of $55,000,
Assume that Chapman Company acquired Abernethy's common stock for $816.280 in cash. Assume that the equipment and long-term
liabilities had fair values of $396,950 and $140,720. respectively, on the acquisition date. Chapman uses the initial value method to
account for its investment.
Prepare 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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