Assume the 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.

Assume the 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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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Pace acquired Saber on January 1, 2021, attributing its $350 million excess of acquisition cost over book value to identifiable intangible assets valued at $100 million, with a 5-year life, and to goodwill. At that time Saber's shareholders' equity was $2,500 million. It is now December 31, 2022, and consolidation entries are prepared. The investment account balance on January 1, 2022 was $3,000 million. Saber reported net income of $200 million in 2022. Goodwill is not impaired in either year, and Saber does not declare dividends. Required a. What was Saber's 2021 reported net income? $ 300 x million b. What was Saber's shareholders' equity on January 1, 2022? $ 2,670 ✓ million c. Calculate Pace's equity in net income of Saber for 2022, using the complete equity method. $ 2,500 x million d. Prepare the eliminating entries needed to consolidate Pace and Saber at December 31, 2022. Enter answers in millions. Ref. Description (C) Equity in net income of Saber Investment in Saber (E)…
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On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020: BookValue FairValueCurrent assets $ 130,000 $ 130,000 Land 75,000 193,000 Building (twenty year life) 250,000 276,000 Equipment (ten year life) 540,000 518,000 Current liabilities 26,000 26,000 Long-term liabilities 124,000 124,000 Common stock 233,000 Additional paid-in capital 389,000 Retained earnings 223,000 Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. At the end of 2023 the consolidation entry…
On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020: BookValue FairValueCurrent assets $ 130,000 $ 130,000 Land 75,000 193,000 Building (twenty year life) 250,000 276,000 Equipment (ten year life) 540,000 518,000 Current liabilities 26,000 26,000 Long-term liabilities 124,000 124,000 Common stock 233,000 Additional paid-in capital 389,000 Retained earnings 223,000 Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year. What is the balance in Barber's Investment…