Reference no: EM131247583
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2014. As of that date, Abernethy has the following trial balance:
Debit Credit
Accounts payable $ 55,100 cr
Accounts receivable $ 44,700 dr
Additional paid-in capital 50,000 cr
Buildings (net) (4-year life) 163,000 dr
Cash and short-term investments 83,750 dr
Common stock 250,000cr
Equipment (net) (5-year life) 207,500dr
Inventory 122,000 dr
Land 85,500 dr
Long-term liabilities (mature 12/31/17) 162,500 cr
Retained earnings, 1/1/14 202,150 cr
Supplies 13,300 dr
Totals $ 719,750 $ 719,750
During 2014, Abernethy reported net income of $105,000 while declaring and paying dividends of $13,000. During 2015, Abernethy reported net income of $136,750 while declaring and paying dividends of $36,000.
Assume that Chapman Company acquired Abernethy’s common stock for $605,600 in cash. As of January 1, 2014, Abernethy’s land had a fair value of $101,800, its buildings were valued at $227,400, and its equipment was appraised at $164,500. Chapman uses the equity method for this investment.
Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015.
1.) Prepare entry S. December 31, 2014
2.) Prepare entry A. December 31, 2014
3.) Prepare entry I December 31, 2014
4.) Prepare entry D December 31, 2014
5.)Prepare entry E December 31, 2014
6.) Prepare entry S December 31, 2014
7.) Prepare entry A December 31, 2014
8.) Prepare entry I December 31, 2014
9.) Prepare entry D December 31, 2014
10.) Prepare entry E December 31, 2014
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Prepare consolidation worksheet entries for december
: Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2014. Assume that Chapman Company acquired Abernethy’s common stock for $605,600 in cash. Chapman uses the equity method for this investment. Prepare consolidation workshe..
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