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

	Debit			Credit
Accounts payable				$	50,000
Accounts receivable	$	40,000
Additional paid-in capital					50,000
Buildings (net) (4-year remaining life)		120,000
Cash and short-term investments		60,000
Common stock					250,000
Equipment (net) (5-year remaining life)		200,000
Inventory		90,000
Land		80,000
Long-term liabilities (mature 12/31/23)					150,000
Retained earnings, 1/1/20					100,000
Supplies		10,000
Totals	$	600,000		$	600,000

During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000.

Assume that Chapman Company acquired Abernethys common stock for $490,000 in cash. As of January 1, 2020, Abernethys land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses the equity method for this investment.

Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021.

Consolidation Worksheet Entries

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

Note: Enter debits before credits.

Date	Accounts	Debit	Credit
December 31, 2020