Chapman Company obtains 100 percent of Abernethy Companys stock on January 1, 2014. As of that date, Abernethy has the following trial balance: Debit Credit Accounts payable $ 50,300 Accounts receivable $ 47,500 Additional paid-in capital 50,000 Buildings (net) (4-year life) 201,000 Cash and short-term investments 61,750 Common stock 250,000 Equipment (net) (5-year life) 447,500 Inventory 127,500 Land 124,000 Long-term liabilities (mature 12/31/17) 162,000 Retained earnings, 1/1/14 514,850 Supplies 17,900 Totals $ 1,027,150 $ 1,027,150 During 2014, Abernethy reported net income of $97,000 while declaring and paying dividends of $12,000.

During 2015, Abernethy reported net income of $141,250 while declaring and paying dividends of $48,000.

Assume that Chapman Company acquired Abernethys common stock for $919,830 in cash.

Assume that the equipment and long-term liabilities had fair values of $471,000 and $131,120, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment.