Chapman Company obtains 100 percent of Abernethy Companys stock on January 1, 2017. As of that date, Abernethy has the following trial balance:

	Debit			Credit
Accounts payable				$	56,400
Accounts receivable	$	43,900
Additional paid-in capital					50,000
Buildings (net) (4-year remaining life)		217,000
Cash and short-term investments		76,750
Common stock					250,000
Equipment (net) (5-year remaining life)		367,500
Inventory		96,500
Land		122,000
Long-term liabilities (mature 12/31/20)					182,500
Retained earnings, 1/1/17					396,250
Supplies		11,500
Totals	$	935,150		$	935,150

During 2017, Abernethy reported net income of $103,500 while declaring and paying dividends of $13,000. During 2018, Abernethy reported net income of $145,250 while declaring and paying dividends of $47,000.

Assume that Chapman Company acquired Abernethys common stock for $793,300 in cash. As of January 1, 2017, Abernethys land had a fair value of $134,000, its buildings were valued at $267,800, and its equipment was appraised at $336,250. Chapman uses the equity method for this investment.

Prepare consolidation worksheet entries for December 31, 2017, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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

Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill.

Prepare entry I to eliminate $103,500 income accrual for 2017 less $6,450 amortization recorded by parent using equity method.

Prepare entry D to eliminate intra-entity dividend transfers.

Prepare entry E to recognize current year amortization expense.

Prepare entry S to eliminate beginning stockholders' equity of subsidiarythe Retained Earnings account has been adjusted for 2017 income and dividends. Entry *C is not needed because equity method was applied.

Prepare entry A to recognize allocations relating to investmentbalances shown here are as of beginning of current year [original allocation less excess amortizations for the prior period]

Prepare entry I to eliminate $145,250 income accrual less $6,450 amortization recorded by parent during 2018 using equity method.

Prepare entry D to eliminate intra-entity dividend transfers.

Prepare entry E to recognize current year amortization expense