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Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING
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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Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2017. 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 12/31/20) Retained earnings, 1/1/17 Supplies Totals view transaction list No 1 Date December 31 2017 Debit $ 44,300 137,000 73,750 transaction list 262,500 126,500 100,500 During 2017, Abernethy reported net income of $96,000 while declaring and paying dividends of $12,000. During 2018, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000. Accounts 18,600 $763,150 Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2017, Abernethy's land had a fair value of $111,300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses the equity method for this investment. Common stock - Abernethy Additional paid-in capital Retained earnings - 1/1/17 Investment in Abernethy Credit $ 59,300 50,000 Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018. (If no try is required for a transaction/event, select "No journal entry required" in the first account field.) 250,000 176,000 227,850 $763,150 Debit Credit ****** Ⓒ
Transcribed Image Text:Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2017. 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 12/31/20) Retained earnings, 1/1/17 Supplies Totals view transaction list No 1 Date December 31 2017 Debit $ 44,300 137,000 73,750 transaction list 262,500 126,500 100,500 During 2017, Abernethy reported net income of $96,000 while declaring and paying dividends of $12,000. During 2018, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000. Accounts 18,600 $763,150 Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2017, Abernethy's land had a fair value of $111,300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses the equity method for this investment. Common stock - Abernethy Additional paid-in capital Retained earnings - 1/1/17 Investment in Abernethy Credit $ 59,300 50,000 Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018. (If no try is required for a transaction/event, select "No journal entry required" in the first account field.) 250,000 176,000 227,850 $763,150 Debit Credit ****** Ⓒ
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