nku.5 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 receivableItemsAdditional 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, 1/1/23SuppliesTotalsDebit$ 40,600126,00065,750390,000100,000110,00019,600$ 851,950Credit$ 57,60050,000250,000187,500306,850$ 851,950During 2023, Abernethy reported net income of $108,500 while declaring and paying dividends of $14,000. During 2024, Abernethyreported 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-termliabilities had fair values of $411,450 and $155,580, respectively, on the acquisition date. Chapman uses the initial value method toaccount 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.

The parent company acquires 100% interest in its subsidiary. So, there is no non-controlling…

Answered: Required: Prepare consolidation…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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