Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has thefollowing trial balance:Accounts payableAccounts receivableAdditional paid-in capitalBuildings (net) (4-year remaining Life)Cash and short-term investmentsCommon stockEquipment (net) (5-year remaining life)InventoryLandLong-term Liabilities (mature 12/31/26)Retained earnings, 1/1/23SuppliesTotalsview transaction listItemsConsolidationWorksheet Entries12During 2023, Abernethy reported net income of $87,000 while declaring and paying dividends of $11,000. During 2024, Abernethyreported net income of $122,500 while declaring and paying dividends of $55,000.DateAssume that Chapman Company acquired Abernethy's common stock for $873,250 In cash. As of January 1, 2023, Abernethy's landhad a fair value of $129,800, its buildings were valued at $243,800, and its equipment was appralsed at $403,750. Chapman uses theequity method for this Investment.Note: Enter debits before credits.Record entryRequired:Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.3December 31, 20235Debit6Clear entry$ 43,100175,00075,500439,500127,000116,5007Accounts10,700$ 987,300Credit$ 51,90050,000250,000170,500464,900Prepare entry *C to convert parent's beginning retained earnings to full accrualbasis.$ 987,3008 .. 12DebitCreditview consolidation entries

Journalizing is one of the important processes of recording all the financial transactions in the…

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable Items 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 12/31/26) Retained earnings, 1/1/23 Debit $ 43,100 175,000 75,500 439,500 127,000 116,500 Credit $ 51,900 50,000 250,000 170,500 464.900

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable Items 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 12/31/26) Retained earnings, 1/1/23 Debit $ 43,100 175,000 75,500 439,500 127,000 116,500 Credit $ 51,900 50,000 250,000 170,500 464.900

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

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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: Credit $ 57,300 Debit Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year renaining life) Cash and short-term investnents Common stock Equipment (net) (5-year remaining life) Inventory Land Long-tern liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals $ 42,200 50, 000 214, 000 82,250 250,000 375,000 98,500 117,000 170,000 409,650 16, 000 $936,950 $ 936, 950 During 2020, Abernethy reported net income of $117,500 while declaring and paying dividends of $15.000. During 2021, Abernethy reported net income of $171,250 while declaring and paying dividends of $55,000, Assume that Chapman Company acquired Abernethy's common stock for $816.280 in cash. Assume that the equipment and long-term liabilities had fair values of $396,950 and $140,720. respectively, on the acquisition date. Chapman uses…
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…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Debit Credit $ 50,500 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 $ 44,100 50,000 166,000 79,250 250,000 292,500 100,500 128,000 Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies 188,000 288,850 17,000 Totals $827,350 $ 827,350 During 2020, Abernethy reported net income of $103,000 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $144,250 while declaring and paying dividends of $58,000. Assume that Chapman Company acquired Abernethy's common stock for $694,300 in cash. As of January 1, 2020, Abernethy's land had a fair value of $142,700, its buildings were valued at $210,000, and its equipment was appraised at…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. 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 Items Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 Supplies Totals Debit view transaction list $ 48,200 161,000 81,750 242,500 135,500 129,500 Consolidation Worksheet Entries Credit $ 50,800 50,000 250,000 16,700 $ 815,150 $815, 150 During 2023, Abernethy reported net income of $90,000 while declaring and paying dividends of $11,000. During 2024, Abernethy reported net income of $134,750 while declaring and paying dividends of $34,000. 167,000 297,350 Assume that Chapman Company acquired Abernethy's common stock for $694,850 in cash. As of January 1, 2023, Abernethy's land had a fair value of $140,700, its buildings were…
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 1 Totals 2 3 4 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. 5 7 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 6 8 Prepare consolidation worksheet entries for December…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. 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 12/31/26) Retained earnings, 1/1/23 Supplies No 1 2 3 4 5 6 During 2023, Abernethy reported net income of $126,000 while declaring and paying dividends of $16,000. During 2024, Abernethy reported net income of $174,000 while declaring and paying dividends of $49,000. 7 Assume that Chapman Company acquired Abernethy's common stock by paying $785,800 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. 8 Items Totals Required: Prepare the consolidation worksheet entries for December…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. 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 12/31/26) Retained earnings, 1/1/23 Supplies No 1 2 3 4 During 2023, Abernethy reported net income of $104,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $137,750 while declaring and paying dividends of $34,000. 5 Assume that Chapman Company acquired Abernethy's common stock by paying $921,650 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. 6 Required: Prepare the consolidation worksheet entries for December 31, 2023, and…
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. 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 12/31/26) Retained earnings, 1/1/23 Supplies Totals Items view transaction list Consolidation Worksheet Entries 1 2 3 Debit 4 $ 44,300 137,000 73,750 During 2023, Abernethy reported net income of $96,000 while declaring and paying dividends of $12,000. During 2024, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000. 5 262,500 126,500 100,500 Assume that Chapman Company acquired Abernethy's common stock for $635,560 in cash. Assume that the equipment and long- term liabilities had fair values of $287,450 and $144,440, respectively, on the acquisition date. Chapman uses the…
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 view transaction list Consolidation Worksheet Entries