Problem 3-19 (Algo) (LO 3-3a) Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts receivable Accounts payable Additional paid-in capital Credit $ 58,000 $ 40,200 50,000 Buildings (net) (4-year remaining life) Cash and short-term investments 170,000 66,750 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 372,500 109,500 Land 116,000 Long-term liabilities (mature 12/31/26) 165,000 Retained earnings, 1/1/23 369,150 Supplies Totals 17,200 $ 892,150 $ 892,150 During 2023, Abernethy reported net Income of $106,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2023, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the equity method for this Investment. Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.
Problem 3-19 (Algo) (LO 3-3a) Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the following trial balance: Items Debit Accounts receivable Accounts payable Additional paid-in capital Credit $ 58,000 $ 40,200 50,000 Buildings (net) (4-year remaining life) Cash and short-term investments 170,000 66,750 Common stock 250,000 Equipment (net) (5-year remaining life) Inventory 372,500 109,500 Land 116,000 Long-term liabilities (mature 12/31/26) 165,000 Retained earnings, 1/1/23 369,150 Supplies Totals 17,200 $ 892,150 $ 892,150 During 2023, Abernethy reported net Income of $106,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $142,750 while declaring and paying dividends of $51,000. Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2023, Abernethy's land had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the equity method for this Investment. Required: Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024. Note: If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 3-19 (Algo) (LO 3-3a)
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2023. As of that date, Abernethy has the
following trial balance:
Items
Debit
Accounts receivable
Accounts payable
Additional paid-in capital
Credit
$ 58,000
$ 40,200
50,000
Buildings (net) (4-year remaining life)
Cash and short-term investments
170,000
66,750
Common stock
250,000
Equipment (net) (5-year remaining life)
Inventory
372,500
109,500
Land
116,000
Long-term liabilities (mature 12/31/26)
165,000
Retained earnings, 1/1/23
369,150
Supplies
Totals
17,200
$ 892,150
$ 892,150
During 2023, Abernethy reported net Income of $106,500 while declaring and paying dividends of $13,000. During 2024, Abernethy
reported net income of $142,750 while declaring and paying dividends of $51,000.
Assume that Chapman Company acquired Abernethy's common stock for $759,900 in cash. As of January 1, 2023, Abernethy's land
had a fair value of $126,400, its buildings were valued at $211,600, and its equipment was appraised at $344,500. Chapman uses the
equity method for this Investment.
Required:
Prepare consolidation worksheet entries for December 31, 2023, and December 31, 2024.
Note: If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.
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