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 $ 50,500 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 $ 44,100 50,000 166,000 79,250 250,000 292,500 100,500 128,000 188,000 288,850 17,000 Totals $827,350 $ 827,350 During 2020, Abernethy reported net income of $103,000 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $144,250 while declaring and paying dividends of $58,000. Assume that Chapman Company acquired Abernethy's common stock for $694,300 in cash. As of January 1, 2020, Abernethy's land had a fair value of $142,700, its buildings were valued at $210,000, and its equipment was appraised at $264,000. 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 entry required" in the first account field.) X Answer is not complete. No Date Accounts Debit Credit 1 December 31, 202 Common stock–Abernethy Additional paid-in capital Retained earnings-1/1/20 Investment in Abernethy 2 December 31, 202 Land Buildings
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 $ 50,500 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 $ 44,100 50,000 166,000 79,250 250,000 292,500 100,500 128,000 188,000 288,850 17,000 Totals $827,350 $ 827,350 During 2020, Abernethy reported net income of $103,000 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $144,250 while declaring and paying dividends of $58,000. Assume that Chapman Company acquired Abernethy's common stock for $694,300 in cash. As of January 1, 2020, Abernethy's land had a fair value of $142,700, its buildings were valued at $210,000, and its equipment was appraised at $264,000. 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 entry required" in the first account field.) X Answer is not complete. No Date Accounts Debit Credit 1 December 31, 202 Common stock–Abernethy Additional paid-in capital Retained earnings-1/1/20 Investment in Abernethy 2 December 31, 202 Land Buildings
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
Debit
Credit
$ 50,500
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
$ 44,100
50,000
166,000
79,250
250,000
292,500
100,500
128,000
Land
Long-term liabilities (mature 12/31/23)
Retained earnings, 1/1/20
Supplies
188,000
288,850
17,000
Totals
$827,350
$ 827,350
During 2020, Abernethy reported net income of $103,000 while declaring and paying dividends of $13,000. During
2021, Abernethy reported net income of $144,250 while declaring and paying dividends of $58,000.
Assume that Chapman Company acquired Abernethy's common stock for $694,300 in cash. As of January 1, 2020,
Abernethy's land had a fair value of $142,700, its buildings were valued at $210,000, and its equipment was appraised
at $264,000. 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 entry required" in the first account field.)
X Answer is not complete.
No
Date
Accounts
Debit
Credit
1
December 31, 202 Common stock-Abernethy
Additional paid-in capital
Retained earnings-1/1/20
Investment in Abernethy
December 31, 202 Land
Buildings
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