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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 $ 57,700 Accounts receivable $ 45,000 Additional paid-in capital 50,000 Buildings (net) (4-year remaining life) 124,000 Cash and short-term investments 68,250 Common stock 250,000 Equipment (net) (5-year remaining life) 327,500 Inventory 103,000 Land 106,000 Long-term liabilities (mature 12/31/23) 183,500 Retained earnings, 1/1/20 252,350 Supplies 19,800 Totals $ 793,550 $ 793,550 During 2020, Abernethy reported net income of $101,000 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $152,000 while declaring and paying dividends of $39,000. Assume that Chapman Company acquired Abernethys common stock for $696,650 in cash. As of January 1, 2020, Abernethys land had a fair value of $124,300, its buildings were valued at $200,000, and its equipment was appraised at $305,750. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021.

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

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 the income accrual for 2020 less the amortization recorded by the parent using the equity method.

Prepare entry D to eliminate intra-entity dividend transfers.

Prepare entry E to recognize current year amortization expense.

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

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

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

Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method.

Prepare entry D to eliminate intra-entity dividend transfers.

Prepare entry E to recognize current year amortization expense.

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