Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has thefollowing trial balance:Credit$ 57,300DebitAccounts payableAccounts receivableAdditional paid-in capitalBuildings (net) (4-year renaining life)Cash and short-term investnentsCommon stockEquipment (net) (5-year remaining life)InventoryLandLong-tern liabilities (mature 12/31/23)Retained earnings, 1/1/20SuppliesTotals$ 42,20050, 000214, 00082,250250,000375,00098,500117,000170,000409,65016, 000$936,950$ 936, 950During 2020, Abernethy reported net income of $117,500 while declaring and paying dividends of $15.000. During 2021, Abernethyreported 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-termliabilities had fair values of $396,950 and $140,720. respectively, on the acquisition date. Chapman uses the initial value method toaccount for its investment.Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)

Fair value allocation and annual excess amortizations: Abernethy fair value…

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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