ts payable $ 50,500 Accounts receiva
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that date, Abernethy has the following
| Debit | Credit | ||||
| Accounts payable | $ | 50,500 | |||
| Accounts receivable | $ | 44,100 | |||
| Additional paid-in capital | 50,000 | ||||
| Buildings (net) (4-year remaining life) | 166,000 | ||||
| Cash and short-term investments | 79,250 | ||||
| Common stock | 250,000 | ||||
| Equipment (net) (5-year remaining life) | 292,500 | ||||
| Inventory | 100,500 | ||||
| Land | 128,000 | ||||
| Long-term liabilities (mature 12/31/23) | 188,000 | ||||
| 288,850 | |||||
| Supplies | 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 $692,830 in cash. Assume that the equipment and long-term liabilities had fair values of $313,100 and $156,920, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment.
Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No
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