Chapman Company obtains 100 percent of Abernethy Companyâs stockon January 1, 2014. As of that date, Abernethy has the followingtrial balance:
Debit Credit Accounts payable $ 55,800 Accounts receivable $ 42,500 Additional paid-in capital 50,000 Buildings (net) (4-year life) 209,000 Cash and short-term investments 67,250 Common stock 250,000 Equipment (net) (5-year life) 357,500 Inventory 136,000 Land 114,000 Long-term liabilities (mature 12/31/17) 168,500 Retained earnings, 1/1/14 414,650 Supplies 12,700 Totals $ 938,950 $ 938,950
During 2014, Abernethy reportednet income of $104,500 while declaring and paying dividends of$13,000. During 2015, Abernethy reported net income of $137,750while declaring and paying dividends of $34,000.
Assume that Chapman Company acquired Abernethyâs common stockfor $849,550 in cash. As of January 1, 2014, Abernethyâs land had afair value of $128,300, its buildings were valued at $274,600, andits equipment was appraised at $334,750. Chapman uses the equitymethod for this investment.
Prepare consolidation worksheet entries for December 31, 2014,and December 31, 2015. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
Chapman Company obtains 100 percent of Abernethy Companyâs stockon January 1, 2014. As of that date, Abernethy has the followingtrial balance:
| Debit | Credit | ||||
| Accounts payable | $ | 55,800 | |||
| Accounts receivable | $ | 42,500 | |||
| Additional paid-in capital | 50,000 | ||||
| Buildings (net) (4-year life) | 209,000 | ||||
| Cash and short-term investments | 67,250 | ||||
| Common stock | 250,000 | ||||
| Equipment (net) (5-year life) | 357,500 | ||||
| Inventory | 136,000 | ||||
| Land | 114,000 | ||||
| Long-term liabilities (mature 12/31/17) | 168,500 | ||||
| Retained earnings, 1/1/14 | 414,650 | ||||
| Supplies | 12,700 | ||||
| Totals | $ | 938,950 | $ | 938,950 | |
During 2014, Abernethy reportednet income of $104,500 while declaring and paying dividends of$13,000. During 2015, Abernethy reported net income of $137,750while declaring and paying dividends of $34,000. |
Assume that Chapman Company acquired Abernethyâs common stockfor $849,550 in cash. As of January 1, 2014, Abernethyâs land had afair value of $128,300, its buildings were valued at $274,600, andits equipment was appraised at $334,750. Chapman uses the equitymethod for this investment. |
Prepare consolidation worksheet entries for December 31, 2014,and December 31, 2015. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.) |
Related questions
| Chapman Company obtains 100 percent of Abernethy Companyâs stock on January 1, 2014. As of that date, Abernethy has the following trial balance: |
| Debit | Credit | ||||
| Accounts payable | $ | 52,800 | |||
| Accounts receivable | $ | 49,500 | |||
| Additional paid-in capital | 50,000 | ||||
| Buildings (net) (4-year life) | 174,000 | ||||
| Cash and short-term investments | 84,000 | ||||
| Common stock | 250,000 | ||||
| Equipment (net) (5-year life) | 315,000 | ||||
| Inventory | 137,500 | ||||
| Land | 90,500 | ||||
| Long-term liabilities (mature 12/31/17) | 188,500 | ||||
| Retained earnings, 1/1/14 | 323,600 | ||||
| Supplies | 14,400 | ||||
|
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| Totals | $ | 864,900 | $ | 864,900 | |
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| During 2014, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2015, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. |
| Assume that Chapman Company acquired Abernethyâs common stock by paying $768,600 in cash. All of Abernethyâs 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. |
| Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015. (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 Companyâs stock on January 1, 2014. 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 life) | 214,000 | ||||
| Cash and short-term investments | 82,250 | ||||
| Common stock | 250,000 | ||||
| Equipment (net) (5-year life) | 375,000 | ||||
| Inventory | 90,500 | ||||
| Land | 117,000 | ||||
| Long-term liabilities (mature 12/31/17) | 170,000 | ||||
| Retained earnings, 1/1/14 | 409,650 | ||||
| Supplies | 16,000 | ||||
| Totals | $ | 936,950 | $ | 936,950 | |
| During 2014, Abernethy reported net income of $117,500 while declaring and paying dividends of $15,000. During 2015, Abernethy reported net income of $171,250 while declaring and paying dividends of $55,000. |
| Assume that Chapman Company acquired Abernethyâs common stock for $860,500 in cash. As of January 1, 2014, Abernethyâs land had a fair value of $132,000, its buildings were valued at $287,600, and its equipment was appraised at $352,500. Chapman uses the equity method for this investment. |
| Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) There should be ten entries and I solved the first few:
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