Question
In: Accounting
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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 CreditAccounts payable $55,800Accounts receivable$42,500 Additional paid-in capital 50,000Buildings (net) (4-year remaining life) 209,000 Cash and short-term investments 67,250 Common stock 250,000Equipment (net) (5-year remaining life) 357,500 Inventory 136,000 Land 114,000 Long-term liabilities (mature 12/31/23) 168,500Retained earnings, 1/1/20 414,650Supplies 12,700 Totals$938,950 $938,950
During 2020, Abernethy reported net income of $104,500 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $137,750 while declaring and paying dividends of $34,000.
Assume that Chapman Company acquired Abernethy’s common stock for $819,720 in cash. Assume that the equipment and long-term liabilities had fair values of $378,350 and $137,980, 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 journal entry required" in the first account field.)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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 CreditAccounts payable $55,100Accounts
receivable$44,700 Additional paid-in
capital 50,000Buildings (net) (4-year
remaining life) 163,000 Cash and short-term
investments 83,750 Common
stock 250,000Equipment (net) (5-year
remaining life) 207,500 Inventory
122,000 Land 85,500 Long-term
liabilities (mature
12/31/23) 162,500Retained earnings,
1/1/20 202,150Supplies
13,300 Totals$719,750 $719,750
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...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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
Accounts
payable
$
56,700
Accounts
receivable
$
43,800
Additional
paid-in capital
50,000
Buildings (net)
(4-year remaining life)
143,000
Cash and
short-term investments
80,250
Common
stock
250,000
Equipment (net)
(5-year remaining life)
295,000
Inventory
110,500
Land
112,000
Long-term
liabilities (mature 12/31/23)
171,000
Retained
earnings, 1/1/20
268,750
Supplies
11,900
Totals
$
796,450
$
796,450
During 2020, Abernethy...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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
Accounts
payable
$
57,700
Accounts
receivable
$
45,000
Additional
paid-in capital
50,000
Buildings (net)
(4-year remaining life)
124,000
Cash and
short-term investments
68,250
Common
stock
250,000
Equipment (net)
(5-year remaining life)
327,500
Inventory
103,000
Land
106,000
Long-term
liabilities (mature 12/31/23)
183,500
Retained
earnings, 1/1/20
252,350
Supplies
19,800
Totals
$
793,550
$
793,550
During 2020, Abernethy...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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 Accounts payable $ 55,800 Accounts
receivable $ 42,500 Additional paid-in capital 50,000 Buildings
(net) (4-year remaining life) 209,000 Cash and short-term
investments 67,250 Common stock 250,000 Equipment (net) (5-year
remaining life) 357,500 Inventory 136,000 Land 114,000 Long-term
liabilities (mature 12/31/23) 168,500 Retained earnings, 1/1/20
414,650 Supplies 12,700 Totals $ 938,950 $ 938,950 During 2020,
Abernethy...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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
Accounts payable
$
57,300
Accounts receivable
$
42,200
Additional paid-in capital
50,000
Buildings (net) (4-year remaining life)
214,000
Cash and short-term investments
82,250
Common stock
250,000
Equipment (net) (5-year remaining life)
375,000
Inventory
90,500
Land
117,000
Long-term liabilities (mature 12/31/23)
170,000
Retained earnings, 1/1/20
409,650
Supplies
16,000
Totals
$
936,950
$
936,950
During 2020, Abernethy...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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
Accounts payable
$
51,900
Accounts receivable
$
43,100
Additional paid-in capital
50,000
Buildings (net) (4-year remaining life)
175,000
Cash and short-term investments
75,500
Common stock
250,000
Equipment (net) (5-year remaining life)
439,500
Inventory
127,000
Land
116,500
Long-term liabilities (mature 12/31/23)
170,500
Retained earnings, 1/1/20
464,900
Supplies
10,700
Totals
$
987,300
$
987,300
During 2020, Abernethy...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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
Accounts payable
$
50,000
Accounts receivable
$
40,000
Additional paid-in capital
50,000
Buildings (net) (4-year remaining life)
120,000
Cash and short-term investments
60,000
Common stock
250,000
Equipment (net) (5-year remaining life)
200,000
Inventory
90,000
Land
80,000
Long-term liabilities (mature 12/31/23)
150,000
Retained earnings, 1/1/20
100,000
Supplies
10,000
Totals
$
600,000
$
600,000
During 2020, Abernethy...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that...
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
Accounts payable
$
56,400
Accounts receivable
$
43,900
Additional paid-in capital
50,000
Buildings (net) (4-year remaining life)
217,000
Cash and short-term investments
76,750
Common stock
250,000
Equipment (net) (5-year remaining life)
367,500
Inventory
96,500
Land
122,000
Long-term liabilities (mature 12/31/23)
182,500
Retained earnings, 1/1/20
396,250
Supplies
11,500
Totals
$
935,150
$
935,150
During 2020, Abernethy...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2017. As of that...
Chapman Company obtains 100 percent of Abernethy Company’s stock
on January 1, 2017. As of that date, Abernethy has the following
trial balance:DebitCreditAccounts payable$53,700Accounts
receivable$41,000Additional paid-in capital50,000Buildings (net)
(4-year remaining life)184,000Cash and short-term
investments77,250Common stock250,000Equipment (net) (5-year
remaining life)400,000Inventory117,500Land107,500Long-term
liabilities (mature 12/31/20)173,000Retained earnings,
1/1/17417,450Supplies16,900Totals$944,150$944,150During 2017,
Abernethy reported net income of $98,000 while declaring and paying
dividends of $12,000. During 2018, Abernethy reported net income of
$128,250 while declaring and paying dividends of $39,000.Assume
that Chapman Company acquired Abernethy’s common stock...
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2017. As of that...
Chapman Company obtains 100 percent of Abernethy Company’s stock
on January 1, 2017. As of that date, Abernethy has the following
trial balance:DebitCreditAccounts payable$55,100Accounts
receivable$44,700Additional paid-in capital50,000Buildings (net)
(4-year remaining life)163,000Cash and short-term
investments83,750Common stock250,000Equipment (net) (5-year
remaining life)207,500Inventory122,000Land85,500Long-term
liabilities (mature 12/31/20)162,500Retained earnings,
1/1/17202,150Supplies13,300Totals$719,750$719,750During 2017,
Abernethy reported net income of $105,000 while declaring and
paying dividends of $13,000. During 2018, Abernethy reported net
income of $136,750 while declaring and paying dividends of
$36,000.Assume that Chapman Company acquired Abernethy’s common
stock...
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