Homework Help is Here – Start Your Trial Now!
Business
Accounting
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 entru

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 entru

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

nku.5

 

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 $ 40,600 126,000 65,750 390,000 100,000 110,000 19,600 $ 851,950 Credit $ 57,600 50,000 250,000 187,500 306,850 $ 851,950 During 2023, Abernethy reported net income of $108,500 while declaring and paying dividends of $14,000. During 2024, Abernethy reported net income of $139,750 while declaring and paying dividends of $54,000. Assume that Chapman Company acquired Abernethy's common stock for $711,320 in cash. Assume that the equipment and long-term liabilities had fair values of $411,450 and $155,580, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment. 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.
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 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 $ 40,600 126,000 65,750 390,000 100,000 110,000 19,600 $ 851,950 Credit $ 57,600 50,000 250,000 187,500 306,850 $ 851,950 During 2023, Abernethy reported net income of $108,500 while declaring and paying dividends of $14,000. During 2024, Abernethy reported net income of $139,750 while declaring and paying dividends of $54,000. Assume that Chapman Company acquired Abernethy's common stock for $711,320 in cash. Assume that the equipment and long-term liabilities had fair values of $411,450 and $155,580, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment. 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.
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Consolidations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS