1
Prepare entry S to eliminate stockholders' equity accounts of subsidiary.
2
Prepare entry A to recognize goodwill portion of the original acquisition fair value.
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.
4
Prepare entry D to eliminate intra-entity dividend transfers.
5
Prepare entry E.
6
Prepare entry *C.
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.
8
Prepare entry A to recognize original goodwill balance.
9
Prepare entry I to eliminate Intra-entity Income accrual for the current year.
10
Prepare entry D to eliminate Intra-entity dividend transfers.
11
Prepare entry E.
No Journal entries in relates to " Amortization " of Goodwill ,,
Assume that Chapman Company Acquired Abernetty Common stock by | ||||||
paying $802850 In cash | ||||||
Chapman used Equiy method of accounting ( partial) to account for its Investment | ||||||
We need to pass couple of Journal Entries in case of Consolidation Report | ||||||
1 | Eliminate Stockholders Equity Account of Subsidiary | |||||
Details | Debit($) | Credit($) | ||||
additional paid up capital | 50,000 | |||||
Common Stock | 2,50,000 | |||||
Reatined Earnings | 3,38,850 | |||||
Investement in Abernethy( Subsidiary) | 6,38,850 | |||||
Book Value $ | 6,38,850 | |||||
As per Question , | ||||||
Assume that Chapman Company Acquired Abernetty Common stock by | ||||||
paying In cash $ | 8,02,850 | |||||
Chapman used Equiy method of accounting ( partial) to account for its Investment | ||||||
So we ned to calculate Goodwill - Excess of fair value paid in cash > Book Value | ||||||
$ 802850-$638850 | ||||||
Goodwill $ | 1,64,000 | |||||
Accounted Goodwill Enty | ||||||
2 | Details | Debit($) | Credit($) | |||
Goodwill | 1,64,000 | |||||
Investement in Abernethy( Subsidiary) | 1,64,000 | |||||
3 | Prepare entry to eliminate Intra entity - Income Accrual | |||||
for the current year- based on partial Equity method | ||||||
During 2017 . Subsidiary reported net Income $ | 1,24,000 | |||||
Declaring dividend $ | 16,000 | |||||
Accounted Elimination entry | ||||||
Details | Debit($) | Credit($) | ||||
Earming on Subsidiary | 1,24,000 | |||||
Investement in Abernethy( Subsidiary) | 1,24,000 | |||||
Divided Declared | ||||||
4 | Details | Debit($) | Credit($) | |||
Investement in Abernethy( Subsidiary) | 16,000 | |||||
Divided \ | 16,000 | |||||
5 | Amortization - We should not pass any Entry in this matter | |||||
6 | Entry - Year 2018 - No Entry relates to Amortization | |||||
7 | Details | Debit($) | Credit($) | |||
additional paid up capital | 50,000 | |||||
Common Stock | 2,50,000 | |||||
Reatined Earnings | 4,46,850 | |||||
Investement in Abernethy( Subsidiary) | 7,46,850 | |||||
Reatined Earnings | Amnt($) | |||||
Opening | 3,38,850 | |||||
Add- Income Accried | 1,24,000 | |||||
Less divided | 16,000 | |||||
Closing retained Earnings | 4,46,850 | |||||
Accounted Goodwill Enty | ||||||
8 | Details | Debit($) | Credit($) | |||
Goodwill | 1,64,000 | |||||
Investement in Abernethy( Subsidiary) | 1,64,000 | |||||
9 | Details | Debit($) | Credit($) | |||
Earming on Subsidiary | 1,64,750 | |||||
Investement in Abernethy( Subsidiary) | 1,64,750 | |||||
10 | Divided Declared | |||||
Details | Debit($) | Credit($) | ||||
Investement in Abernethy( Subsidiary) | 60,000 | |||||
Divided \ | 60,000 |
1 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2 Prepare entry A to...
1. Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2. Prepare entry A to recognize goodwill portion of the original acquisition fair value. 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. 4. Prepare entry D to eliminate intra-entity dividend transfers. 5. Prepare entry E. 6. Prepare entry *C. 7. Prepare entry S to eliminate beginning of year stockholders' equity accounts of subsidiary—the retained...
Questions: 1. Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2. Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. 3. Prepare entry I to eliminate $122,500 income accrual for 2017 less $11,000 amortization recorded by parent using equity method. 4. Prepare entry D to eliminate intra-entity dividend transfers. 5. Prepare entry E to recognize current year amortization expense. 6. Prepare entry S to...
Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 2 Prepare entry A to recognize allocations determined above in connection with acquisition-date fair values. 3 Prepare entry I to eliminate intra-entity dividend declarations recorded by parent as income. 4 Prepare entry E to recognize 2017 amortization expense. 5 Prepare entry *C to convert parent company figures to equity method by recognizing subsidiary's increase in book value for prior year [$117,500 net income less $15,000 dividend declaration] and excess amortizations...
Tasks: Prepare entry A to recognize goodwill portion of the original acquisition fair value. Prepare entry I to eliminate intra-entity income accrual for the current year based on the parent's usage of the partial equity method Prepare entry D to eliminate intra-entity dividend transfers Prepare entry E Prepare entry *C. 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 Prepare entry A to recognize original...
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 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...
Tasks: Prepare entry A to recognize allocations determined above in connection with acquisition-date fair values. Prepare entry I to eliminate intra-entity dividend declarations recorded by parent as income. Prepare entry E to recognize 2017 amortization expense. Prepare entry *C to convert parent company figures to equity method by recognizing subsidiary's increase in book value for prior year [$104,500 net income less $13,000 dividend declaration] and excess amortizations for that period [$11,800]. Prepare entry A to recognize allocations relating to investment—balances...
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...
Problem 3-20 (LO 3-3b) 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 $...
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...