in cash. Assume that Chapman Company acquired Abernethy's common stock by paying: All of Abernethy's accounts are estimated to have a fair value approximately equal to present book walues. Chapman uses the partial equity method to account for its investment. Prepare the consolida- ion worksheet entries for December 31, 2023, and December 31, 2024.
in cash. Assume that Chapman Company acquired Abernethy's common stock by paying: All of Abernethy's accounts are estimated to have a fair value approximately equal to present book walues. Chapman uses the partial equity method to account for its investment. Prepare the consolida- ion worksheet entries for December 31, 2023, and December 31, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:21. Assume that Chapman Company acquired Abernethy's common stock by paying $520,000 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. Prepare the consolida-
tion worksheet entries for December 31, 2023, and December 31, 2024.
Transcribed Image Text:following data:
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...
Debit
$ 40,000
120,000
60,000
200,000
90,000
80,000
10,000
$600,000
Credit
$ 50,000
50,000
250,000
150,000
100,000
$600,000
During 2023, Abernethy reported net income of $80,000 while declaring and paying dividends
of $10,000. During 2024, Abernethy reported net income of $110,000 while declaring and paying
dividends of $30,000.
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