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				$	51,500
Accounts receivable	$	46,500
Additional paid-in capital					50,000
Buildings (net) (4-year remaining life)		190,000
Cash and short-term investments		67,750
Common stock					250,000
Equipment (net) (5-year remaining life)		442,500
Inventory		107,000
Land		93,500
Long-term liabilities (mature 12/31/23)					166,500
Retained earnings, 1/1/20					448,250
Supplies		19,000
Totals	$	966,250		$	966,250

During 2020, Abernethy reported net income of $99,000 while declaring and paying dividends of $12,000. During 2021, Abernethy reported net income of $151,250 while declaring and paying dividends of $53,000.

Assume that Chapman Company acquired Abernethys common stock for $855,330 in cash. Assume that the equipment and long-term liabilities had fair values of $464,600 and $134,620, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment.

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

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

1 Prepare entry S to eliminate stockholders' equity accounts of subsidiary.

2 . Prepare entry A to recognize allocations in connection with acquisition-date fair values.

3 .Prepare entry I to eliminate intra-entity dividends.

4.Prepare entry E to recognize 2020 amortization expense.

5.Prepare entry *C to convert parent company figures to equity method.

6. Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021.

7. Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021.

8.Prepare entry I to eliminate intra-entity dividends.

9. Prepare entry E to recognize 2021 amortization expense.