rroDiems 19 through 21 should be viewed as independent situations. They are based on the following data:Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy hasthe following trial balance:Page 136DebitCreditAccounts payable$ 50,000Accounts receivable$ 40,000Additional paid-in capitalBuildings (net) (4-year remaining life)50,000120,000Cash and short-term investments60,000Common stock250,000Equipment (net) (5-year remaining life)Inventory200,00090,000Land80,000Long-term liabilities (mature 12/31/23)150,000Retained earnings, 1/1/20100,000Supplies10,000$600,000$600,000TotalsDuring 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $ 10,000. During 2021, Abernethyreported net income of $110,000 while declaring and paying dividends of $30,000.LO 3-3a1. Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2020, Abernethy's landhad a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses theequity method for this investment. Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021.LO 3-3b

Consolidated worksheet Consolidated financial statements of a parent and its subsidiaries are…

Answered: based on the following data: Page 136…

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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On January 15, 2020 bieber co purchased 30,000 shares of Hand Co. at $35 per share, paying $10,000 in commissions to the broker of the deal. On March 17, 2020, Hand Co. paid a cash dividend of $2.50 per share. The fair value of the Hand Co. stock at the end of 2020 was $38 per share. During 2020, Hand Co. had net income of $3,000,000. Prepare the journal entries for Bieber Co. for the above transaction assuming the amount of shares purchased represents 40% of Hand Co. outstanding stock.
January 1, 2020, ABC Ltd. elects to make a long-term investment and purchases 5,000 shares of XY Company for $5.50 per share. This represents 25% of the voting shares and results in significant influence. The net income for XY Company in 2020 is $50,000. XY Company declared and paid $5,000 in dividends on December 31, 2020. In 2021, XY Company had an operating loss of $30,000 and no dividends were declared. In 2021, it was determined that goodwill was impaired by 20%. XY Company had the following assets and liabilities at cost and fair market value at January 1, 2020:   Cost Market  Cash  15,000 15,000 Accounts Receivable  10,000 10,000 Inventory  10,000 8,000 Capital Assets, net  100,000 130,000   135,000 163,000 Liabilities  69,500 69,500 Assume that the capital assets have 10 years of life remaining at January 1, 2020 and are amortized using the straight-line method. Required 1: Prepare a goodwill schedule (also known as a purchase price discrepancy schedule) for…
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PLease explain the calculate for buildings and equipment n handwritten
On January 1, 2020, Churl Company paid $1,700,000 for a 40% stake in Flip Company. The Flip Company's stockholders equity on January 1 and December 31, 2020 is shown below: Share capital Revaluation surplus Retained earnings January 1 3,000,000 1,000,000 December 31 3,000,000 1,300,000 1,500,000 By Jan 1, 2020, all of Flip's identified assets and liabilities were recognized at fair value. During the current fiscal year, the flip firm recorded a profit before income tax of 1,000,000 and paid dividends to stockholders of 150,000. The revaluation excess is the outcome of Flip Company's land reassessment on December 31, 2020. Flip displays OCI net of any relevant income tax. Furthermore, Flip Company provides depreciation using the declining balance approach, whereas Churl Company employs a straight line. The cumulative depreciation would have been enhanced by 200,000 if Flip Company had used the straight line. The tax rate is set at 35%. On December 31, 2020, Churl Company will report its…
On 1 January 2019 Apples Ltd acquired all the assets and liabilities of Berries Ltd. Details of the consideration transferred are as follows: Cash of $200,000, half to be paid on 1 January 2019, with the balance due on 1 January 2020. The incremental borrowing rate for Apples Ltd is 10%. 100,000 shares in Apples Ltd were issued. The share price on 1 January 2019 was $5.00 per share. This price represented a six-month high. Costs of issuing the shares was $1,000. Supply of a motor vehicle to Berries Ltd. The fair value of the motor vehicle is $60,000. The motor vehicle had an original cost of $90,000, and had accumulated depreciation of $40,000 as at 1 January 2019 in Apples Ltd accounting records. Legal fees and associated with the acquisition totalled $5,000. Required: Calculate the consideration transferred.
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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…
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2017. As of that date, Abernethy has the following trial balance: Debit Credit Accounts payable $ 52,400 Accounts receivable $ 48,600 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 179,000 Cash and short-term investments 61,250 Common stock 250,000 Equipment (net) (5-year remaining life) 260,000 Inventory 121,500 Land 105,000 Long-term liabilities (mature 12/31/20) 174,500 Retained earnings, 1/1/17 264,650 Supplies 16,200 Totals $ 791,550 $ 791,550 During 2017, Abernethy reported net income of $86,000 while declaring and paying dividends of $11,000. During 2018, Abernethy reported net income of $124,500 while declaring and paying dividends of $47,000. Assume that Chapman Company acquired Abernethy’s common stock for $675,160 in cash. Assume…
Prepare consoldiation worksheet entries for December 31, 2020 and December 31, 2021.
hapman 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 payable $ 56,700 Accounts receivable $ 43,800 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 143,000 Cash and short-term investments 80,250 Common stock 250,000 Equipment (net) (5-year remaining life) 295,000 Inventory 110,500 Land 112,000 Long-term liabilities (mature 12/31/23) 171,000 Retained earnings, 1/1/20 268,750 Supplies 11,900 Totals $ 796,450 $ 796,450 During 2020, Abernethy reported net income of $122,500 while declaring and paying dividends of $15,000. During 2021, Abernethy reported net income of $159,250 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy’s common stock for $698,050 in cash. As of…
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