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Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for

Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for

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, 2023. As of that date, Abernethy has the following trial balance: Items 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 12/11/26) Retained earnings, 1/1/23 Supplies Totals Debit $ 41,500 211,000 70,750 430,000 139,000 121,500 Credit $ 58,900 50,000 250,000 174,000 498,450 17,600 $ 1,031,350 $ 1,031,350 During 2023, Abernethy reported net income of $120,000 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $170,000 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock for $902,200 in cash. As of January 1, 2023, Abernethy's land had a fair value of $133,000, its buildings were valued at $277,000, and its equipment was appraised at $393,500. Chapman uses the equity method for this investment. Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for
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: Items 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 12/11/26) Retained earnings, 1/1/23 Supplies Totals Debit $ 41,500 211,000 70,750 430,000 139,000 121,500 Credit $ 58,900 50,000 250,000 174,000 498,450 17,600 $ 1,031,350 $ 1,031,350 During 2023, Abernethy reported net income of $120,000 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $170,000 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock for $902,200 in cash. As of January 1, 2023, Abernethy's land had a fair value of $133,000, its buildings were valued at $277,000, and its equipment was appraised at $393,500. Chapman uses the equity method for this investment. Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for
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