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Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2014. As of that date, Abernethy has the following trial balance: (see attachment)
During 2014, Abernethy reported net income of $122,000 while declaring and paying dividends of $15,000. During 2015, Abernethy reported net income of $175,000 while declaring and paying dividends of $55,000.
Assume that Chapman Company acquired Abernethy’s common stock for $877,650 in cash. As of January 1, 2014, Abernethy’s land had a fair value of $116,200, its buildings were valued at $285,600, and its equipment was appraised at $391,750. Chapman uses the equity method for this investment.
Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015.
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2014. As of that date, Abernethy has the following trial balance: (see attachment)
During 2014, Abernethy reported net income of $122,000 while declaring and paying dividends of $15,000. During 2015, Abernethy reported net income of $175,000 while declaring and paying dividends of $55,000.
Assume that Chapman Company acquired Abernethy’s common stock for $877,650 in cash. As of January 1, 2014, Abernethy’s land had a fair value of $116,200, its buildings were valued at $285,600, and its equipment was appraised at $391,750. Chapman uses the equity method for this investment.
Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015.
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