ZuoTi.Pro
Question

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:

Debit Credit
Accounts payable $ 52,400
Accounts receivable $ 48,600
Additional paid-in capital 50,000
Buildings (net) (4-year remaining life) 179,000
Cash and short-term investments 61,250
Common stock 250,000
Equipment (net) (5-year remaining life) 260,000
Inventory 121,500
Land 105,000
Long-term liabilities (mature 12/31/20) 174,500
Retained earnings, 1/1/17 264,650
Supplies 16,200
Totals $ 791,550 $ 791,550

During 2017, Abernethy reported net income of $86,000 while declaring and paying dividends of $11,000. During 2018, Abernethy reported net income of $124,500 while declaring and paying dividends of $47,000.

Assume that Chapman Company acquired Abernethy’s common stock by paying $752,650 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.

Prepare the consolidation worksheet entries for December 31, 2017, and December 31, 2018.

Journal entry #1- Prepare entry S to eliminate stockholders' equity accounts of subsidiary.

Journal entry #2- Prepare entry A to recognize goodwill portion of the original acquisition fair value.

Journal entry #3- Prepare entry I to eliminate intra-entity income accrual for the current year based on the parent's usage of the partial equity method.

Journal entry #4- Prepare entry D to eliminate intra-entity dividend transfers.

Journal entry #5- Prepare entry E.

Journal entry #6- Prepare entry *C.

Journal entry #7- Prepare entry S to eliminate beginning of year stockholders' equity accounts of subsidiary—the retained earnings balance has been adjusted for 2017 income and dividends.

Journal entry #8- Prepare entry A to recognize original goodwill balance.

Journal entry #9- Prepare entry I to eliminate Intra-entity Income accrual for the current year.

Journal entry #10- Prepare entry D to eliminate Intra-entity dividend transfers.

Journal entry #11- Prepare entry E. (I'm certain this is a no entry required)

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Sussidia Cemmen &tock Mc Ox o,50,000 8.64 650 Acdditionat paid in capital Al 564,650 Dr 1550 Good wuAl 188000 To diatitities Alc. To lash (ruuichose consideraition da6a00 5265D stbunethy Compam iaiilitiu Accounts payabtet dong tesm iatilitis 53400 124500 nty3 eliminate inta entuty incom a s86000 quityin subiidhosy eaningt 6000 in Mbuincthy Companeliminade intra ently daividund To 见wn clenols ole clared 49 000 Duxetiatien expense Ac Te Brildlingt Alc 44350 Fa0ou quup men No need o this e pantial eqity method uity in subuduany earningiyle AY 134500 To arweutment in Mbernethi Co Alc 124500 41000 To ividlunda olectaned

0 0
Add a comment
Know the answer?
Add Answer to:
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2017. As of that...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 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: Debit Credit Accounts payable $ 52,400 Accounts receivable $ 48,600 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 179,000 Cash and short-term investments 61,250 Common stock 250,000 Equipment (net) (5-year remaining life) 260,000 Inventory 121,500 Land 105,000 Long-term liabilities (mature 12/31/20) 174,500 Retained earnings, 1/1/17 264,650 Supplies 16,200 Totals $ 791,550 $ 791,550 During 2017, 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: Debit Credit Accounts payable $ 58,900 Accounts receivable $ 41,500 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 211,000 Cash and short-term investments 70,750 Common stock 250,000 Equipment (net) (5-year remaining life) 430,000 Inventory 139,000 Land 121,500 Long-term liabilities (mature 12/31/20) 174,000 Retained earnings, 1/1/17 498,450 Supplies 17,600 Totals $ 1,031,350 $ 1,031,350 During 2017, 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: Debit Credit Accounts payable $ 52,400 Accounts receivable $ 48,600 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 179,000 Cash and short-term investments 61,250 Common stock 250,000 Equipment (net) (5-year remaining life) 260,000 Inventory 121,500 Land 105,000 Long-term liabilities (mature 12/31/20) 174,500 Retained earnings, 1/1/17 264,650 Supplies 16,200 Totals $ 791,550 $ 791,550 During 2017, 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: Debit Credit Accounts payable $ 52,400 Accounts receivable $ 48,600 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 179,000 Cash and short-term investments 61,250 Common stock 250,000 Equipment (net) (5-year remaining life) 260,000 Inventory 121,500 Land 105,000 Long-term liabilities (mature 12/31/20) 174,500 Retained earnings, 1/1/17 264,650 Supplies 16,200 Totals $ 791,550 $ 791,550 During 2017, 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: Debit Credit Accounts payable $ 52,400 Accounts receivable $ 48,600 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 179,000 Cash and short-term investments 61,250 Common stock 250,000 Equipment (net) (5-year remaining life) 260,000 Inventory 121,500 Land 105,000 Long-term liabilities (mature 12/31/20) 174,500 Retained earnings, 1/1/17 264,650 Supplies 16,200 Totals $ 791,550 $ 791,550 During 2017, 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: Debit Credit $ 51,500 $ 46,500 50,000 190,000 67,750 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/20) Retained earnings, 1/1/17 Supplies Totals 250,000 442,500 107,000 93,500 166,500 448,250 19,000 $966,250 $966,250 During 2017, Abernethy reported net...

  • 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: Debit Credit Accounts payable $ 52,800 Accounts receivable $ 49,500 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 174,000 Cash and short-term investments 84,000 Common stock 250,000 Equipment (net) (5-year remaining life) 315,000 Inventory 137,500 Land 90,500 Long-term liabilities (mature 12/31/20) 188,500 Retained earnings, 1/1/17 323,600 Supplies 14,400 Totals $ 864,900 $ 864,900 During 2017, 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: 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 12/31/20) 168,500 Retained earnings, 1/1/17 414,650 Supplies 12,700 Totals $ 938,950 $ 938,950 During 2017, 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: Debit Credit Accounts payable $ 59,900 Accounts receivable $ 43,700 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 123,000 Cash and short-term investments 80,500 Common stock 250,000 Equipment (net) (5-year remaining life) 270,000 Inventory 138,500 Land 118,500 Long-term liabilities (mature 12/31/20) 175,000 Retained earnings, 1/1/17 257,100 Supplies 17,800 Totals $ 792,000 $ 792,000 During 2017, 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: Debit Credit Accounts payable $ 52,800 Accounts receivable $ 49,500 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 174,000 Cash and short-term investments 84,000 Common stock 250,000 Equipment (net) (5-year remaining life) 315,000 Inventory 137,500 Land 90,500 Long-term liabilities (mature 12/31/20) 188,500 Retained earnings, 1/1/17 323,600 Supplies 14,400 Totals $ 864,900 $ 864,900 During 2017, Abernethy...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT