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, 1/1/23SuppliesTotalsview transaction listItemsConsolidationWorksheet Entries12During 2023, Abernethy reported net income of $87,000 while declaring and paying dividends of $11,000. During 2024, Abernethyreported net income of $122,500 while declaring and paying dividends of $55,000.DateAssume that Chapman Company acquired Abernethy's common stock for $873,250 In cash. As of January 1, 2023, Abernethy's landhad a fair value of $129,800, its buildings were valued at $243,800, and its equipment was appralsed at $403,750. Chapman uses theequity method for this Investment.Note: Enter debits before credits.Record entryRequired:Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.3December 31, 20235Debit6Clear entry$ 43,100175,00075,500439,500127,000116,5007Accounts10,700$ 987,300Credit$ 51,90050,000250,000170,500464,900Prepare entry *C to convert parent's beginning retained earnings to full accrualbasis.$ 987,3008 .. 12DebitCreditview consolidation entries

Journalizing is one of the important processes of recording all the financial transactions in the…

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 Debit $ 43,100 175,000 75,500 439,500 127,000 116,500 Credit $ 51,900 50,000 250,000 170,500 464.900

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 Debit $ 43,100 175,000 75,500 439,500 127,000 116,500 Credit $ 51,900 50,000 250,000 170,500 464.900

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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