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 $ 47,500 201,000 61,750 447,500 127,500 124,000 Credit $ 50,300 50,000 250,000 162,000 514,850 17,900 $ 1,027,150 $ 1,027,150 During 2023, Abernethy reported net income of $97,000 while declaring and paying dividends of $12,000. During 2024, Abernethy reported net income of $141,250 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock by paying $935,850 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment. Required: Prepare the 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.
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 $ 47,500 201,000 61,750 447,500 127,500 124,000 Credit $ 50,300 50,000 250,000 162,000 514,850 17,900 $ 1,027,150 $ 1,027,150 During 2023, Abernethy reported net income of $97,000 while declaring and paying dividends of $12,000. During 2024, Abernethy reported net income of $141,250 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock by paying $935,850 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment. Required: Prepare the 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.
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, 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
Items
Equipment (net) (5-year remaining life)
Inventory
Land
Long-term liabilities (mature 12/31/26)
Retained earnings, 1/1/23
Supplies
Totals
Debit
$ 47,500
view transaction list
-
201,000
61,750
447,500
127,500
124,000
Credit
$ 50,300
50,000
250,000
162,000
514,850
17,900
$ 1,027,150 $ 1,027,150
During 2023, Abernethy reported net income of $97,000 while declaring and paying dividends of $12,000. During 2024, Abernethy
reported net income of $141,250 while declaring and paying dividends of $48,000.
Assume that Chapman Company acquired Abernethy's common stock by paying $935,850 in cash. All of Abernethy's accounts are
estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its
investment.
Required:
Prepare the 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.
CI
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