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. view transaction list Consolidation Worksheet Entries < 1 2 3 Debit During 2020, Abernethy reported net income of $106,500 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. 4 $ 40,200 170,000 66,750 Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2020, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the equity method for this investment. 5 372,500 109,500 116,000 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.) 6 17,200 $892,150 Credit $ 58,000 50,000 7 250,000 8 165,000 369,150 $ 892,150 12 Prepare entry *C to convert parent's beginning retained earnings to full accrual >
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. view transaction list Consolidation Worksheet Entries < 1 2 3 Debit During 2020, Abernethy reported net income of $106,500 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. 4 $ 40,200 170,000 66,750 Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2020, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the equity method for this investment. 5 372,500 109,500 116,000 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.) 6 17,200 $892,150 Credit $ 58,000 50,000 7 250,000 8 165,000 369,150 $ 892,150 12 Prepare entry *C to convert parent's beginning retained earnings to full accrual >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text: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
view transaction list
Consolidation
Worksheet Entries
<
1
2
Debit
3
$ 40,200
170,000
66,750
During 2020, Abernethy reported net income of $106,500 while declaring and paying dividends of $13,000. During 2021, Abernethy
reported net income of $142,750 while declaring and paying dividends of $51,000.
4
372,500
109,500
116,000
Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2020, Abernethy's land
had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the
equity method for this investment.
5
17,200
$892,150
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.)
Credit
$ 58,000
50,000
6 7
250,000
8
165,000
369, 150
$ 892,150
12
Prepare entry *C to convert parent's beginning retained earnings to full accrual
basis.
>
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