Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2017. As of that date, Abernethy has the following trial balance Debit Credit 57,700 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/20) Retained earnings, 1/1/17 Supplies 45,000 50,000 124,000 68,250 250,000 327,500 103,000 106,000 183,500 252,350 19,800 $793,550 Totals 793,550 During 2017, Abernethy reported net income of $101,000 while declaring and paying dividends of $13,000. During 2018, Abernethy reported net income of $152,000 while declaring and paying dividends of $39,000 Assume that Chapman Company acquired Abernethy's common stock for $696,650 in cash. As of January 1, 2017, Abernethy's land had a fair value of $124,300, its buildings were valued at $200,000, and its equipment was appraised at $305,750. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Consolidation Worksheet Entries 123 4 56 7 89 0 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2017 Consolidation Worksheet Entries K12 3 4 5 67890 Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2017 Consolidation Worksheet Entries K1234 5 67 8 910 Prepare entry I to eliminate $117,500 income accrual for 2017 less $13,900 amortization recorded by parent using equity method Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2017 Consolidation Worksheet Entries K123 45 6 7 8 910 Prepare entry D to eliminate intra-entity dividend transfers Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2017 Consolidation Worksheet Entries 123 4 5 67 8 910 Prepare entry E to recognize current year amortization expense. Note: Enter debits before credits. Debit Credit Date December 31, 2017 Accounts Consolidation Worksheet Entries 123 4 567 8 90 Prepare entry S to eliminate beginning stockholders' equity of subsidiary-the Retained Earnings account has been adjusted for 2017 income and dividends Entry *C is not needed because equity method was applied. Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2018 Consolidation Worksheet Entries 12345617 8 9 10 Prepare entry A to recognize allocations relating to investment-balances shown here are as of beginning of current year [original allocation less excess amortizations for the prior period] Note: Enter debits before credits. Date December 31, 2018 Accounts Debit Credit Consolidation Worksheet Entries K123 4 5 678 910 Prepare entry I to eliminate $171,250 income accrual less $13,900 amortization recorded by parent during 2018 using equity method Note: Enter debits before credits. Date Accounts Debit Credit December 31, 2018 Consolidation Worksheet Entries K123 4 5 6 7 8 910 Prepare entry E to recognize current year amortization expense. Note: Enter debits before credits. Date December 31, 2018 Accounts Debit Credit