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 receivableAdditional 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, 1/1/23SuppliesNo1234During 2023, Abernethy reported net income of $104,500 while declaring and paying dividends of $13,000. During 2024, Abernethyreported net income of $137,750 while declaring and paying dividends of $34,000.5Assume that Chapman Company acquired Abernethy's common stock by paying $921,650 in cash. All of Abernethy's accounts areestimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for itsinvestment.6Required:Prepare the consolidation worksheet entries for December 31, 2023, and December 31, 2024.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.7ItemsTotals8910DateDecember 31, 2023 Common stock-AbernethyDecember 31, 2023 No Transaction RecordedAdditional paid-in capital-AbernethyRetained earningsInvestment in AbernethyDecember 31, 2023 No Transaction RecordedDecember 31, 2023 No Transaction RecordedDecember 31, 2023 No Transaction RecordedDecember 31, 2024 No Transaction RecordedDecember 31, 2024 No Transaction RecordedDecember 31, 2024 No Transaction RecordedDebit$ 42,500209,00067,250December 31, 2024 No Transaction Recorded357,500136,000114,000December 31, 2024 No Transaction RecordedCredit$ 55,80050,000250,000Accounts168,500414,65012,700$938,950 $ 938,950Answer is not complete.›› ››Debit250,000✔50,000414,650Credit714,650

To prepare consolidation journal entries for December 31, 2023, and December 31, 2024, we need to…

Required: Prepare the 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 the 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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