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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

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 $ 50,800
Accounts receivable $ 48,200
Additional paid-in capital 50,000
Buildings (net) (4-year remaining life) 161,000
Cash and short-term investments 81,750
Common stock 250,000
Equipment (net) (5-year remaining life) 242,500
Inventory 135,500
Land 129,500
Long-term liabilities (mature 12/31/23) 167,000
Retained earnings, 1/1/20 297,350
Supplies 16,700
Totals $ 815,150 $ 815,150

During 2020, Abernethy reported net income of $90,000 while declaring and paying dividends of $11,000. During 2021, Abernethy reported net income of $134,750 while declaring and paying dividends of $34,000.

Assume that Chapman Company acquired Abernethys common stock for $694,850 in cash. As of January 1, 2020, Abernethys land had a fair value of $140,700, its buildings were valued at $201,800, and its equipment was appraised at $217,250. Chapman uses the equity method for this investment.

Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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