Response to the following problem:
Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2009. As of that date, Abernethy has the following trial balance: During 2009, Abernethy reported income of $80,000 while paying dividends of $10,000. During 2010, Abernethy reported income of $110,000 while paying dividends of $30,000.
Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January 1, 2009, Abernethy's land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses the equity method for this investment.
Prepare consolidation worksheet entries for December 31, 2009, and December 31, 2010.
Reference: (Hoyle 126) Hoyle, Joe Ben. Fundamentals of Advanced Accounting with Dynamic Accounting PowerWeband CPA Success SG Coupon, 3rd Edition. McGraw-Hill Learning Solutions, 2009. .