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Chapman Company obtains 100% of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: During 2020, Abernethy
Chapman Company obtains 100% of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: During 2020, Abernethy reported net income of $80,000 while paying dividends of $10,000. During 2021 , Abernethy reported income of $110,000 while paying dividends of $30,000. Requirement: Assume that Chapman Company acquired Abernethy's common stock for $500,000 in cash. Assume that the equipment and long-term liabilities had fair values of $220,000 and $120,000, respectively, on the acquisition date. Chapman uses the Initial Value method for this investment. Prepare consolidation worksheet entries for December 31, 2020
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