1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kenny6666 [7]
2 years ago
7

Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that date, Abernethy has the followin

g 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 12/31/23) 188,500 Retained earnings, 1/1/20 323,600 Supplies 14,400 Totals $ 864,900 $ 864,900 During 2020, Abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. During 2021, Abernethy reported net income of $176,000 while declaring and paying dividends of $38,000. Assume that Chapman Company acquired Abernethy’s common stock for $731,110 in cash. Assume that the equipment and long-term liabilities had fair values of $338,650 and $156,340, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment. Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Business
1 answer:
kobusy [5.1K]2 years ago
4 0

The consolidation worksheet entries for December 31, 2020, and December 31, 2021 is: Debit Common Stock -Abernethy                           $250000; Debit  Additional paid-n capital – Abernethy $50,000; Debit Retained earnings   $431,110; Credit Investment in Abernethy $731,110.

<h3> Consolidation worksheet entries </h3>

December 31, 2020

Entry S

Debit Common Stock -Abernethy                           $250000

Debit  Additional paid-n capital – Abernethy           $50,000

Debit Retained earnings                                           $431,110

($731,110-$250,000-$50,000)

Credit Investment in Abernethy                               $731,110

(Elimination entry for Abernethy common stock)

Entry A          

Debit Goodwill                                             $107,510

Credit Investment in Abernethy                                            $107,510

($731,110-$250,000+$323,600+$50,000)

(To recognize excess acquisition cost as goodwill)

Entry I            

Debit Equity in Earnings of Subsidiary      $129,000

Credit Investment in Abernethy                           $129,000

(Elimination entry for inter-company income for 2020)

Entry D          

Debit Investment in Abernethy                    $16,000

Credit Dividends paid                                               $16,000

(Elimination of inter-company dividend payments)

Entry E            

No Journal Entry Required

(Unamortized goodwill under the partial equity method)

Entry C          

No Journal entry required

(Goodwill unamortized)

December 31, 2021

Entry S

Debit Common Stock – Abernethy                         $250,000

Debit Additional-Paid-in Capital –Abernethy         $50,000

Debit Retained Earnings –Abernethy                        $431,110

($731,110-$250,000-$50,000)

Credit Investment in Abernethy                             $731,110

(Elimination entry of beginning stockholder’s equity balances of Subsidiary)

Entry A

Debit Goodwill                                                         $145,000

Credit Investment in Abernethy                                $145,000

(To record goodwill balance)

Entry I

Debit Equity in Earnings in Subsidiary                   $176,000

Credit Investment in Abernethy                                $176,000

(Elimination of inter-company accrual for the year 2021)

Entry D

Debit Investment in Abernethy                                $38,000

Credit Dividends Paid                                               $38,000

(Elimination of inter-company dividend payments)

Entry E            

No journal entry is required

Therefore the entries is: Debit Common Stock -Abernethy                           $250000; Debit  Additional paid-n capital – Abernethy $50,000; Debit Retained earnings   $431,110; Credit Investment in Abernethy $731,110.

Learn more about  Consolidation worksheet entries here:brainly.com/question/15128084

#SPJ1

You might be interested in
Trade credit and discounts are important strategies used by firms in the daily operations of their business. Calculate the cost
Olegator [25]

Answer:

When a discount is given as 2/12, Net 32, it means that the customer is allowed a 2% discount if they pay off their purchase in 12 days. If they don't, they would have to pay off the full amount in 32 days.

The Cost of a firm's credit is calculated by the formula:

= Discount %/ ( 100% - Discount %) * (360/Allowed payment days - Discount days)

a. 2 / 12, Net 32

= (2%/ (100 - 2% )) * (360 / (32 - 12))

= 36.73%

b) 3/15, Net 36

= (3%/ (100 - 3% )) * (360 / (36 - 15))

= 53.02%

c) 2.5/18, Net 35

= (2.5%/ (100 - 2.5% )) * (360 / (35 - 18))

= 54.30%

d) 2.25/20, Net 38

= (2.25%/ (100 - 2.25% )) * (360 / (38 - 20))

= 46.04%

5 0
3 years ago
During times of rising prices, which of the following is not an accurate statement?a. Average costing will yield results that ar
Levart [38]

Answer:d. LIFO will result in higher income taxes than FIFO

Explanation:

A period of rising prices means price will be higher on the latter goods than the former, inventory sold on Last in first out method (LIFO) will be costlier in this period than inventory sold on First in First out ( FIFO) this invariably means LIFO will result in lower net income due to high cost of inventory compared to FIFO and the lower the net income the lower the income tax this invariably means LIFO will result in lower income tax.

Average costing will yield result that are between those of LIFO and FIFO since it can an average of two price with one LIFO and the other on FIFO, LIFO will result in higher cost of goods sold since the latter goods will be costlier, FIFO will result in higher net income since the goods will be cheaper than LIFO.

5 0
3 years ago
You are purchasing a used car and will make 5 annual payments of $3,500 starting one year from today. If your funds could be inv
bezimeni [28]

Answer:

The Present Value (PV) of the car is $13,614

Explanation:

Computing the Present Value of the car using the excel formula of Present Value which is as:

=PV(rate,nper,PMT,fv,type)

where

rate is 9%

nper is number of years is 5

PMT is annual payments which is of -$3,500

FV is Future value which is not given

Type is 0

Putting the values above:

=PV(9%,5,-3500,0)

= $13,613.78 or $13,614

Therefore, the present value of the car amounts to $13,614

5 0
3 years ago
Before going on his first business trip to China, Bradley asked his Chinese American friend to advise him on customs and values
jonny [76]

Answer:

cultural Business blunder

Explanation:

from the question, we are informed about instance of Branley Before going on his first business trip to China, Bradley asked his Chinese American friend to advise him on customs and values common among the Chinese businesspeople he will likely encounter. In this case Bradley is trying to avoid cultural business blunder.

cultural blunders can be regarded as blunders that occured as a result of

inappropriate use of language among businesses when international professional are communicating or relying with each other, the misunderstanding can result in business failures and other lost. The blunder could be from the business ad as well as product names

5 0
3 years ago
Jason felt the restaurant was too expensive for his taste as soon as he looked at the menu posted on the outside wall by the ent
harina [27]
<span>A product used in this way is known as a Benchmark Item.
Benchmark item refers to the type of  product that is used as a standard when we want to compare it another similar product.
By seeing the price of Burger in this particular situation, Jason could predict the price of other product that being sold in that place.</span>
6 0
3 years ago
Other questions:
  • You are a writer in the early 1900s. living in a major u.s. city, you see many unpleasant things each day: children as young as
    8·1 answer
  • If a certain country considered handshakes in business transactions to be taboo and preferred to use nodding, this would be an e
    7·1 answer
  • Which sentence identifies the concept of perishability? Tourism is a service-oriented field in the goods-service continuum. Four
    15·1 answer
  • Stan, an air-conditioning and heating technician, files a suit against Temp-Set Corporation, alleging that its thermostats are u
    12·1 answer
  • You are involved in training and development for your division at dunder mifflin inc. you want to target some specific organizat
    11·1 answer
  • Suddeth Corporation has entered into a 6 year lease for a building it will use as a warehouse. The annual payment under the leas
    15·1 answer
  • A client is interested in becoming a limited partner of a DPP (direct participation program). He signs a subscription agreement
    5·1 answer
  • Whenever Don calls on potential pest control customers, he emphasizes the fact that, unlike the national franchise competitors,
    15·1 answer
  • The spaghetti sells 340 units per week at $12 per plate. The steak sells 212 units at $16 per plate. Which has the higher
    6·1 answer
  • Last week pauline worked 35 hours and made $280 how much money did pauline make per hour
    8·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!