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Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts payable Accounts receivable Credit $ 56,700 $ 43,800 Cash and short-term investments Additional paid-in capital Buildings (net) (4-year remaining life) Common stock 50,000 143,000 80,250 250,000 Equipment (net) (5-year remaining life) Inventory 295,000 110,500 Land 112,000 Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 171,000 268,750 Supplies 11,900 Totals $ 796,450 $ 796,450 During 2023, Abernethy reported net income of $122,500 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $159,250 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy's common stock by paying $744,750 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. Required: Prepare the 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.

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts payable Accounts receivable Credit $ 56,700 $ 43,800 Cash and short-term investments Additional paid-in capital Buildings (net) (4-year remaining life) Common stock 50,000 143,000 80,250 250,000 Equipment (net) (5-year remaining life) Inventory 295,000 110,500 Land 112,000 Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 171,000 268,750 Supplies 11,900 Totals $ 796,450 $ 796,450 During 2023, Abernethy reported net income of $122,500 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $159,250 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy's common stock by paying $744,750 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. Required: Prepare the 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.

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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Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts payable Accounts receivable Credit $ 56,700 $ 43,800 Cash and short-term investments Additional paid-in capital Buildings (net) (4-year remaining life) Common stock 50,000 143,000 80,250 250,000 Equipment (net) (5-year remaining life) Inventory 295,000 110,500 Land 112,000 Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 171,000 268,750 Supplies 11,900 Totals $ 796,450 $ 796,450 During 2023, Abernethy reported net income of $122,500 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $159,250 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy's common stock by paying $744,750 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. Required: Prepare the 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.
Transcribed Image Text:Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts payable Accounts receivable Credit $ 56,700 $ 43,800 Cash and short-term investments Additional paid-in capital Buildings (net) (4-year remaining life) Common stock 50,000 143,000 80,250 250,000 Equipment (net) (5-year remaining life) Inventory 295,000 110,500 Land 112,000 Long-term liabilities (mature 12/31/26) Retained earnings, 1/1/23 171,000 268,750 Supplies 11,900 Totals $ 796,450 $ 796,450 During 2023, Abernethy reported net income of $122,500 while declaring and paying dividends of $15,000. During 2024, Abernethy reported net income of $159,250 while declaring and paying dividends of $49,000. Assume that Chapman Company acquired Abernethy's common stock by paying $744,750 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. Required: Prepare the 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.
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