dbokrencesProblem 3-19 (Algo) (LO 3-30)Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has thefollowing trial balance:McGrawHAccounts payableAccounts receivableAdditional paid-in capital,Buildings (net) (4-year remaining life).Cash and short-term investmentsCommon stockEquipment (net) (5-year remaining life)InventoryLandLong-term liabilities (mature 12/31/23)Retained earnings, 1/1/20SuppliesTotalsview transaction fist1No234During 2020, Abernethy reported net income of $96,000 while declaring and paying dividends of $12.000. During 2021, Abernethyreported net income of $141,000 while declaring and paying dividends of $45,000DateDecember 312020Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2020, Abernethy's landhad a fair value of $111,300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses theequity method for this investmentDecember 31,2020Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for atransaction/event, select "No journal entry required" in the first account field.)December 31,12020transaction listDebitNo Transaction Recorded$.44,300137,00073,750No Transaction Recorded262,500126,500100,500No Transaction Recorded18,600$763,150Credit$ 59,30050,000250,000176,000227,850Accounts$763,150Debit< PravCredit2 of 3ⒸNext >

Elimination entries refer to adjustments made to a parent company's financial statements to remove…

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: 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 12/31/23) Retained earnings, 1/1/20 Supplies Totals Debit $.44,300 137,000 73,750 262,500 126,500 100,500 18,600 $763,150 Credit $ 59,300 50,000 250,000 176,000 227,850 $763,150 During 2020, Abernethy reported net income of $96.000 while declaring and paying dividends of $12.000. During 2021, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000 Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2020, Abernethy's land had a fair value of $111.300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses the equity method for this investment

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: 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 12/31/23) Retained earnings, 1/1/20 Supplies Totals Debit $.44,300 137,000 73,750 262,500 126,500 100,500 18,600 $763,150 Credit $ 59,300 50,000 250,000 176,000 227,850 $763,150 During 2020, Abernethy reported net income of $96.000 while declaring and paying dividends of $12.000. During 2021, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000 Assume that Chapman Company acquired Abernethy's common stock for $651,300 in cash. As of January 1, 2020, Abernethy's land had a fair value of $111.300, its buildings were valued at $199,400, and its equipment was appraised at $233,500. Chapman uses the equity method for this investment

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 19E

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