Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has thefollowing trial balance:Accounts 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, 1/1/23SuppliesTotalsItemsview transaction listConsolidationWorksheet Entries123Debit4$ 44,300137,00073,750During 2023, Abernethy reported net income of $96,000 while declaring and paying dividends of $12,000. During 2024, Abernethyreported net income of $141,000 while declaring and paying dividends of $45,000.5262,500126,500100,500Assume that Chapman Company acquired Abernethy's common stock for $635,560 in cash. Assume that the equipment and long-term liabilities had fair values of $287,450 and $144,440, respectively, on the acquisition date. Chapman uses the initial value methodto account for its investment.6-Required: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 first account field.18,600$763,150Credit$ 59,30050,000250,000176,000227,850$763,1507 8 9Prepare entry S to eliminate stockholders' equity accounts of subsidiary.>

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable Items 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 73,750 262,500 126,500 100,500 18,600 $763,150 Credit $ 59,300 50,000 250,000 176,000 227,850 $763,150 During 2023 Abernethy reported net income of $96.000 while declaring and paying dividends of $12.000 During 2024 Abernethy

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable Items 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 73,750 262,500 126,500 100,500 18,600 $763,150 Credit $ 59,300 50,000 250,000 176,000 227,850 $763,150 During 2023 Abernethy reported net income of $96.000 while declaring and paying dividends of $12.000 During 2024 Abernethy

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. 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 12/31/26)
Retained earnings, 1/1/23
Supplies
Totals
Items
view transaction list
Consolidation
Worksheet Entries
1
2
3
Debit
4
$ 44,300
137,000
73,750
During 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.
5
262,500
126,500
100,500
Assume that Chapman Company acquired Abernethy's common stock for $635,560 in cash. Assume that the equipment and long-
term liabilities had fair values of $287,450 and $144,440, respectively, on the acquisition date. Chapman uses the initial value method
to account for its investment.
6
-
Required:
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 first account field.
18,600
$763,150
Credit
$ 59,300
50,000
250,000
176,000
227,850
$763,150
7 8 9
Prepare entry S to eliminate stockholders' equity accounts of subsidiary.
>

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