Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals Debit $.44,300 137,000 73,750 262,500 126,500 100,500 18,600 $763,150 Credit $ 59,300 50,000 250,000 176,000 227,850 $763,150 During 2020, Abernethy reported net income of $96.000 while declaring and paying dividends of $12.000. During 2021, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000 Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2020, Abernethy's land had a fair value of $111.300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses the equity method for this investment

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Problem 3-19 (Algo) (LO 3-30)
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the
following trial balance:
Mc
Graw
H
Accounts payable
Accounts receivable
Additional paid-in capital,
Buildings (net) (4-year remaining life).
Cash and short-term investments
Common stock
Equipment (net) (5-year remaining life)
Inventory
Land
Long-term liabilities (mature 12/31/23)
Retained earnings, 1/1/20
Supplies
Totals
view transaction fist
1
No
2
3
4
During 2020, Abernethy reported net income of $96,000 while declaring and paying dividends of $12.000. During 2021, Abernethy
reported net income of $141,000 while declaring and paying dividends of $45,000
Date
December 31
2020
Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2020, Abernethy's land
had a fair value of $111,300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses the
equity method for this investment
December 31,
2020
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.)
December 31,1
2020
transaction list
Debit
No Transaction Recorded
$.44,300
137,000
73,750
No Transaction Recorded
262,500
126,500
100,500
No Transaction Recorded
18,600
$763,150
Credit
$ 59,300
50,000
250,000
176,000
227,850
Accounts
$763,150
Debit
< Prav
Credit
2 of 3
Ⓒ
Next >
Transcribed Image Text:d bok rences Problem 3-19 (Algo) (LO 3-30) Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Mc Graw H Accounts payable Accounts receivable Additional paid-in capital, Buildings (net) (4-year remaining life). Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals view transaction fist 1 No 2 3 4 During 2020, Abernethy reported net income of $96,000 while declaring and paying dividends of $12.000. During 2021, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000 Date December 31 2020 Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2020, Abernethy's land had a fair value of $111,300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses the equity method for this investment December 31, 2020 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.) December 31,1 2020 transaction list Debit No Transaction Recorded $.44,300 137,000 73,750 No Transaction Recorded 262,500 126,500 100,500 No Transaction Recorded 18,600 $763,150 Credit $ 59,300 50,000 250,000 176,000 227,850 Accounts $763,150 Debit < Prav Credit 2 of 3 Ⓒ Next >
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