Chapman 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 $ 50,000 Accounts receivable $ 40,000 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 120,000 Cash and short-term investments 60,000 Common stock 250,000 Equipment (net) (5-year remaining life) 200,000 Inventory 90,000 Land 80,000 Long-term liabilities (mature 12/31/23) 150,000 Retained earnings, 1/1/20 100,000 Supplies 10,000 Totals $ 600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy’s common stock for $490,000 in cash. As of January 1, 2020, 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, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal
I need help with requirement 3, 4, 5 and 6 please (A, I, D and E).
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that date, Abernethy has the following
Debit | Credit | ||||
Accounts payable | $ | 50,000 | |||
$ | 40,000 | ||||
Additional paid-in capital | 50,000 | ||||
Buildings (net) (4-year remaining life) | 120,000 | ||||
Cash and short-term investments | 60,000 | ||||
Common stock | 250,000 | ||||
Equipment (net) (5-year remaining life) | 200,000 | ||||
Inventory | 90,000 | ||||
Land | 80,000 | ||||
Long-term liabilities (mature 12/31/23) | 150,000 | ||||
100,000 | |||||
Supplies | 10,000 | ||||
Totals | $ | 600,000 | $ | 600,000 | |
During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000.
Assume that Chapman Company acquired Abernethy’s common stock for $490,000 in cash. As of January 1, 2020, 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, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No
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