Homework 3 Essay

5279 WordsJul 14, 201422 Pages
10/13/12 Assignment Print View Score: 45.94 1. out of 50 points (91.88%) aw ard: 10 out of 10.00 points Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2011. As of that date, Abernethy has the following trial balance: Debit Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year life) Cash and short-term investments Common stock Equipment (net) (5-year life) Inventory Land Long-term liabilities (mature 12/31/14) Retained earnings, 1/1/11 Supplies Totals $ $ Credit 50,000 40,000 50,000 120,000 60,000 250,000 200,000 90,000 80,000 150,000 100,000 10,000 $ 600,000 $ 600,000 During 2011, Abernethy reported income…show more content…
Chapman uses the equity method for this investment. Required: Prepare consolidation worksheet adjustments for December 31, 2011, and December 31, 2012. (Omit the "$" sign in your response.) Date Dec. 31, 2011 (1a) General Journal Common stock-Abernethy ezto.mhecloud.mcgraw-hill.com/hm.tpx?todo=printview Debit Credit 250,000 2/18 10/13/12 Assignment Print View Additional paid in capital 50,000 Retained earnings 100,000 Investment in Abernethy (1b) 400,000 Land 10,000 40,000 Buildings Equipment (1c) 20,000 Investment in Abernethy 30,000 Goodwill 60,000 Investment in Abernethy (2a1) 60,000 Equity in subsidiary earnings 74,000 Investment in Abernethy (2a2) 74,000 No entry required 0 No entry required (2b) 0 Investment in Abernathy 10,000 Dividends paid (3a1) 10000 Depreciation expense 10,000 Building (3a2) 10,000 Equipment 4,000 Depreciation expense (3b) 4,000 No entry required 0 No entry required Dec. 31, 2012 (1a) 0 Common stock-Abernathy 250,000 Additional paid-in capital 50,000 Retained earnings 170,000 Investment in Abernathy (1b) 470,000 Land 10,000 Building 30,000 Equipment -16,000 Investment in Abernathy (1c) 24,000 Goodwill 60,000 Investment in Abernathy (2a1) 60,000 Equity in subsidiary earnings 104,000

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