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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 During 2017, Abernethy reported net income of $98,500 while declaring and paying dividends of $12,000. During 2018, 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, 2017, 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, 2017, and December 31, 2018.

Debit Credit
Accounts payable $ 59,500
Accounts receivable $ 46,600
Additional paid-in capital 50,000
Buildings (net) (4-year remaining life) 145,000
Cash and short-term investments 84,250
Common stock 250,000
Equipment (net) (5-year remaining life) 257,500
Inventory 106,000
Land 129,000
Long-term liabilities (mature 12/31/20) 151,000
Retained earnings, 1/1/17 273,050
Supplies 15,200
Totals $ 783,550 $ 783,550
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Above question is about consolidation. Refer below images for the above mentioned questions, in a detailed way of solution.solokon Fair value allocation & Annual Amortization : 8 699850 (573050) Acquisition fair value (consideration transferred) BoX Consolidation Entries as of December 31, 2017 : Entrys Common Stock - Abernethy All or Additional paid in Capital 41 or RetEntry $ 12000 D Investment in Abernethy Al or To Dividends declared (Being to eliminate intra-entity dividend transters) $ 12Entry A Dr Dr Land Ak 12400 Buildings tic 1 54300 Goodwill Al 82000 То е</opm от To investment in Abernethy [Being to recogni

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