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I just need question number 7 which is: Prepare entry *C (asterisk C) to convert parent's beginning retained earnings to full accrual basis   also I tried this answer $ 84500 but it is wrong too (103000 -(13000+7500))=84500.

I just need question number 7 which is: Prepare entry *C (asterisk C) to convert parent's beginning retained earnings to full accrual basis   also I tried this answer $ 84500 but it is wrong too (103000 -(13000+7500))=84500.

Intermediate Accounting: Reporting And Analysis
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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I just need question number 7 which is: Prepare entry *C (asterisk C) to convert parent's beginning retained earnings to full accrual basis

 

also I tried this answer $ 84500 but it is wrong too (103000 -(13000+7500))=84500. 

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 comm Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies 7 2 1 8 9 During 2020, Abernethy reported net income of $105,000 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $136,750 while declaring and paying dividends of $36,000. 3 5 Assume that Chapman Company acquired Abernethy's common stock for $605,600 in cash. As of January 1, 2020, Abernethy's land had a fair value of $101,800, its buildings were valued at $227,400, and its equipment was appraised at $164,500. Chapman uses the equity method for this investment. No 4 6 Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Totals 10 11 12 Date December 31, 202 No journal entry required December 31, 202(Land Buildings Goodwill December 31, 202 Common stock-Abernethy Additional paid-in capital Retained earnings-1/1/20 Investment in Abernethy December 31, 202 Investment in Abernethy Dividends declared December 31, 202 Depreciation expense Equipment Buildings Debit $ 44,700 Equipment Investment in Abernethy wwnvillyu 163,000 83,750 December 31, 202 Investment in Abernethy 207,500 122,000 85,500 December 31, 2021 Equity in subsidiary earnings Investment in Abernethy 13,300 $719,750 December 31, 202 Land Buildings Goodwill Retained earnings-1/1/20 December 31, 202 Common stock-Abernethy Additional paid-in capital Retained earnings-1/1/21 December 31, 202 Investment in Abernethy Dividends declared Accounts December 31, 202 Depreciation expense Equipment Equipment Investment in Abernethy Credit $ 55,100 50,000 December 31, 202 Equity in subsidiary earnings Investment in Abernethy 250,000 162,500 202,150 $ 719,750 3 3333 ✓ ✓ ›› ›› >>> J 333 33333 >> ✓ Debit ✓ ✓ 250,000✔ 50,000 ✓ 202,150 16,300✔ 64,400✔ 65,750✔ X 294,150 X x 97,500✔ 13,000 > 7,500✔✓ 8,600 250,000✔ 50,000✔ 294,150 16,300 48,300✔ 65,750 129,250 36,000 7,500 › › › 8,600 ›› Credit 502,150 43,000✔ 103,450 97,500 13,000✔ 16,100 294,150 X 594,150 34,400 95,950 129,250 36,000
Transcribed Image Text: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 comm Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies 7 2 1 8 9 During 2020, Abernethy reported net income of $105,000 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $136,750 while declaring and paying dividends of $36,000. 3 5 Assume that Chapman Company acquired Abernethy's common stock for $605,600 in cash. As of January 1, 2020, Abernethy's land had a fair value of $101,800, its buildings were valued at $227,400, and its equipment was appraised at $164,500. Chapman uses the equity method for this investment. No 4 6 Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Totals 10 11 12 Date December 31, 202 No journal entry required December 31, 202(Land Buildings Goodwill December 31, 202 Common stock-Abernethy Additional paid-in capital Retained earnings-1/1/20 Investment in Abernethy December 31, 202 Investment in Abernethy Dividends declared December 31, 202 Depreciation expense Equipment Buildings Debit $ 44,700 Equipment Investment in Abernethy wwnvillyu 163,000 83,750 December 31, 202 Investment in Abernethy 207,500 122,000 85,500 December 31, 2021 Equity in subsidiary earnings Investment in Abernethy 13,300 $719,750 December 31, 202 Land Buildings Goodwill Retained earnings-1/1/20 December 31, 202 Common stock-Abernethy Additional paid-in capital Retained earnings-1/1/21 December 31, 202 Investment in Abernethy Dividends declared Accounts December 31, 202 Depreciation expense Equipment Equipment Investment in Abernethy Credit $ 55,100 50,000 December 31, 202 Equity in subsidiary earnings Investment in Abernethy 250,000 162,500 202,150 $ 719,750 3 3333 ✓ ✓ ›› ›› >>> J 333 33333 >> ✓ Debit ✓ ✓ 250,000✔ 50,000 ✓ 202,150 16,300✔ 64,400✔ 65,750✔ X 294,150 X x 97,500✔ 13,000 > 7,500✔✓ 8,600 250,000✔ 50,000✔ 294,150 16,300 48,300✔ 65,750 129,250 36,000 7,500 › › › 8,600 ›› Credit 502,150 43,000✔ 103,450 97,500 13,000✔ 16,100 294,150 X 594,150 34,400 95,950 129,250 36,000
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