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Chapman Company obtains 1 0 0 percent of Abernethy Company s stock on January 1 , 2 0 2 3 . As of that date,

Chapman Company obtains 100 percent of Abernethy Companys stock on January 1,2023. As of that date, Abernethy has the following trial balance:
Items Debit Credit
Accounts payable - $ 56,400
Accounts receivable $ 43,900-
Additional paid-in capital -50,000
Buildings (net)(4-year remaining life)217,000-
Cash and short-term investments 76,750-
Common stock -250,000
Equipment (net)(5-year remaining life)367,500-
Inventory 96,500-
Land 122,000-
Long-term liabilities (mature 12/31/26)-182,500
Retained earnings, 1/1/23-396,250
Supplies 11,500-
Totals $ 935,150 $ 935,150
During 2023, Abernethy reported net income of $103,500 while declaring and paying dividends of $13,000. During 2024, Abernethy reported net income of $145,250 while declaring and paying dividends of $47,000.
Assume that Chapman Company acquired Abernethys common stock for $800,660 in cash. Assume that the equipment and long-term liabilities had fair values of $390,450 and $151,340, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment.
Required:
Prepare consolidation worksheet entries for December 31,2023, and December 31,2024.
1. Prepare entry S to eliminate stockholders' equity accounts of subsidiary.
2. Prepare entry A to recognize allocations in connection with acquisition-date fair values.
3. Prepare entry I to eliminate the subsidiary income accrual recognized by the parent.
4. Prepare entry E to recognize 2023 amortization expense.
5. Prepare entry *C to convert parent company figures to equity method.
6. Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2024.
7. Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2024.
8. Prepare entry I to eliminate the subsidiary income accrual recognized by the parent.
9. Prepare entry E to recognize 2024 amortization expense.

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