Business, 12.02.2020 05:41 Jayla1029

Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2012. As of that date, Abernethy has the following trial balance:DebitCreditAccounts payable$53,700 Accounts receivable$41,000 Additional paid-in capital50,000 Buildings (net) (4-year life)184,000 Cash and short-term investments77,250 Common stock250,000 Equipment(net) (5-year life)400,000 Inventory117,500 Land107,500 Long-termliabilities (mature 12/31/15)173,000 Retained earnings, 1/1/12417,450 Supplies16,900 Totals$944,150 $944,150 During 2012, Abernethy reported income of $98,000 while paying dividends of $12,000. During 2013, Abernethy reported income of $128,250 while paying dividends of $39,000.Assume that Chapman Company acquired Abernethy’s common stock for $851,300 in cash. As of January 1, 2012, Abernethy’s land had a fair value of $124,200, its buildings were valued at $254,400, and its equipment was appraised at $378,500. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2012, and December 31, 2013.

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Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2012. As of that date...

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