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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, 1/1/201 Supplies Totals Debit $ 49,500 174,000 84,000 315,000 137,500 90,500 14,400 $864,900 Credit $ 52,800 50,000 250,000 188,500 323,600 $ 864,900 During 2020, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2021, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. Assume that Chapman Company acquired Abernethy's common stock for $733,100 in cash. As of January 1, 2020, Abernethy's land had a fair value of $101,000, its buildings were valued at $242.000, and its equipment was appraised at $279,500. Chapman uses the equity method for this investment. 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.)

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, 1/1/201 Supplies Totals Debit $ 49,500 174,000 84,000 315,000 137,500 90,500 14,400 $864,900 Credit $ 52,800 50,000 250,000 188,500 323,600 $ 864,900 During 2020, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2021, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. Assume that Chapman Company acquired Abernethy's common stock for $733,100 in cash. As of January 1, 2020, Abernethy's land had a fair value of $101,000, its buildings were valued at $242.000, and its equipment was appraised at $279,500. Chapman uses the equity method for this investment. 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.)

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 1MC
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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 $ 49,500 174,000 84,000 view transaction list 315,000 137,500 90,500 Consolidation 14,400 $864,900 Credit $ 52,800 50,000 250,000 188,500 323,600 During 2020, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2021, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. $ 864,900 Assume that Chapman Company acquired Abernethy's common stock for $733,100 in cash. As of January 1, 2020, Abernethy's land had a fair value of $101,000, its buildings were valued at $242,000, and its equipment was appraised at $279,500. Chapman uses the equity method for this investment. 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.)
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 Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals Debit $ 49,500 174,000 84,000 view transaction list 315,000 137,500 90,500 Consolidation 14,400 $864,900 Credit $ 52,800 50,000 250,000 188,500 323,600 During 2020, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2021, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. $ 864,900 Assume that Chapman Company acquired Abernethy's common stock for $733,100 in cash. As of January 1, 2020, Abernethy's land had a fair value of $101,000, its buildings were valued at $242,000, and its equipment was appraised at $279,500. Chapman uses the equity method for this investment. 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.)
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