Chapman Company obtains $100$ percent of Abernethy Company$$s stock on January $1,2020.$ As of that date, Abernethy has the following trial balance:

Debit Credit

Accounts payable $ $54,200$

Accounts receivable $ $42,900$

Additional paid$-$in capital $50,000$

Buildings $($net$)(4-$year remaining life$)192,000$

Cash and short$-$term investments $73,500$

Common stock $250,000$

Equipment $($net$)(5-$year remaining life$)245,000$

Inventory $99,000$

Land $128,500$

Long$-$term liabilities $($mature $12/31/23)160,000$

Retained earnings, $1/1/20279,200$

Supplies $12,500$

Totals $ $793,400$ $ $793,400$

During $2020,$ Abernethy reported net income of $$120,500$ while declaring and paying dividends of $$15,000.$ During $2021,$ Abernethy reported net income of $$172,000$ while declaring and paying dividends of $$40,000.$

Assume that Chapman Company acquired Abernethy$$s common stock for $$714,650$ in cash. As of January $1,2020,$ Abernethy$$s land had a fair value of $$139,200,$ its buildings were valued at $$262,000,$ and its equipment was appraised at $$218,000.$ Chapman uses the equity method for this investment.

Prepare consolidation worksheet

Prepare entry $*$C to convert parent's beginning retained earnings to full accrual basis.eet entries for December $31,2020,$ and December $31,2021.$

Prepare entry S to eliminate stockholders' equity accounts of subsidiary.

Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill.

Prepare entry I to eliminate the income accrual for $2020$ less the amort

Prepare entry $*$C to convert parent's beginning retained earnings to full accrual basis.

Prepare entry S to eliminate stockholders

Prepare entry A to recognize allocations attributed to specific ac

Prepare entry I to eliminate the income accrual for $2021$ less the a

Prepare entry E to recognize current year amortization expense.