Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date,Abernethy has the following trial balance:ItemsAccounts payableAccounts receivableAdditional paid-in capitalBuildings (net) (4-year remaining life)Cash and short-term investmentsCommon stockEquipment (net) (5-year remaining life)InventoryLandLong-term liabilities (mature 12/31/26)Retained earnings, 1/1/23SuppliesTotalsview transaction listConsolidationWorksheet Entries2During 2023, Abernethy reported net Income of $96,000 while declaring and paying dividends of $12,000.During 2024, 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 January1, 2023, Abernethy's land had a fair value of $111,300, its buildings were valued at $199,400, and itsequipment was appraised at $233,500. Chapman uses the equity method for this Investment.Note: Enter debits before credits.DateRequired:Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024.Note: If no entry is required for a transaction/event, select "No Journal entry required" in the firstaccount field.3December 31, 2023Record entry45Debit$ 44,300137,00073,7506Clear entry262,500126,500100,500AccountsCredit$ 59,30050,00018,600$763,150 $763,150250,000Prepare entry A to recognize allocations attributed to specific accounts atacquisition date.176,000227,8507812DebitCreditview consolidation entries>

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 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 12/31/26) Retained earnings, 1/1/23 Supplies Totals Debit $ 44,300 137,000 73,750 262,588 126,500 100, 500 Credit $ 59,300 50,000 250,000 176,000 227,858 18,600 $763,150 $763,150

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 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 12/31/26) Retained earnings, 1/1/23 Supplies Totals Debit $ 44,300 137,000 73,750 262,588 126,500 100, 500 Credit $ 59,300 50,000 250,000 176,000 227,858 18,600 $763,150 $763,150

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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