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 2$ $ 46,600 Accounts payable Accounts...


Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has<br>the following trial balance:<br>Debit<br>Credit<br>2$<br>$ 46,600<br>Accounts payable<br>Accounts receivable<br>Additional paid-in capital<br>Buildings (net) (4-year remaining life)<br>Cash and short-term investments<br>59,500<br>50,000<br>145,000<br>84, 250<br>Common stock<br>250,000<br>Equipment (net) (5-year remaining life)<br>Inventory<br>257,500<br>106, ө00<br>129,000<br>Land<br>Long-term liabilities (mature 12/31/23)<br>Retained earnings, 1/1/20<br>Supplies<br>151,000<br>273,050<br>15, 200<br>Totals<br>$783,550<br>$ 783,550<br>During 2020, Abernethy reported net income of $98,500 while declaring and paying dividends of $12,000. During 2021,<br>Abernethy reported net income of $132,250 while declaring and paying dividends of $48,000.<br>Assume that Chapman Company acquired Abernethy's common stock for $699,850 in cash. As of January 1, 2020,<br>Abernethy's land had a fair value of $141,400, its buildings were valued at $217,400, and its equipment was appraised at<br>$217,500. Chapman uses the equity method for this investment.<br>Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a<br>transaction/event, select

Extracted 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: Debit Credit 2$ $ 46,600 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments 59,500 50,000 145,000 84, 250 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 257,500 106, ө00 129,000 Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies 151,000 273,050 15, 200 Totals $783,550 $ 783,550 During 2020, Abernethy reported net income of $98,500 while declaring and paying dividends of $12,000. During 2021, Abernethy reported net income of $132,250 while declaring and paying dividends of $48,000. Assume that Chapman Company acquired Abernethy's common stock for $699,850 in cash. As of January 1, 2020, Abernethy's land had a fair value of $141,400, its buildings were valued at $217,400, and its equipment was appraised at $217,500. 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.)

Jun 11, 2022
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