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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.

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.

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: 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 $ 40,200 170,000 66,750 372,500 109,500 116,000 17, 200 $ 892,150 Credit $ 58,000 50,000 250,000 165,000 369, 150 $ 892,150 During 2023, Abernethy reported net income of $106,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2023, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. 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 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 $ 40,200 170,000 66,750 372,500 109,500 116,000 17, 200 $ 892,150 Credit $ 58,000 50,000 250,000 165,000 369, 150 $ 892,150 During 2023, Abernethy reported net income of $106,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2023, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. 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 a transaction/event, select "No journal entry required" in the first account field.
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