Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Accounts payable Accounts receivable. Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Debit Credit $ 55,100 $ 44,700 50,000 163,000 83,750 Common stock 250,000 Equipment (net) (5-year remaining life) 207,500 Inventory 122,000 Land 85,500 Long-term liabilities (mature 12/31/23) 262,500 Retained earnings, 1/1/20 202,150 Supplies Totals 13,300 $719,750 $ 719,750 During 2020, Abernethy reported net income of $105,000 while declaring and paying dividends of $13,000. During 2021. Abernethy reported net income of $136,750 while declaring and paying dividends of $36,000 Assume that Chapman Company acquired Abernethy's common stock for $605,600 in cash. As of January 1, 2020, Abernethy's land had a fair value of $101,800, its buildings were valued at $227,400, and its equipment was appraised at $164,500. Chapman uses the equity method for this investment.