Debit Credit Accounts payable Accounts receivable.. Additional paid-in capital... Buildings (net) (4-year remaining life) Cash and short-term investments $ 50,000 $ 40,000 50,000 120,000 60,000 Common stock 250,000 Equipment (net) (5-year remaining life) . Inventory...... Land..... Long-term liabilities (mature 12/31/20). Retained earnings, 1/1/17.. Supplies 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 Totals. $600,000
Problems 19 through 21 should be viewed as independent situations. They are based on the following data:
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2017. As of that date, Abernethy has the following trial balance:
During 2017, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2018, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000.
Assume that Chapman Company acquired Abernethy’s common stock by paying $520,000 in cash. All of Abernethy’s accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment. Prepare the consolidation worksheet entries for December 31, 2017, and December 31, 2018.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
