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				$	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 12/31/20)					166,500
Retained earnings, 1/1/17					448,250
Supplies		19,000
Totals	$	966,250		$	966,250

During 2017, Abernethy reported net income of $99,000 while declaring and paying dividends of $12,000. During 2018, Abernethy reported net income of $151,250 while declaring and paying dividends of $53,000.

Assume that Chapman Company acquired Abernethys common stock for $866,800 in cash. As of January 1, 2017, Abernethys land had a fair value of $110,900, its buildings were valued at $232,400, and its equipment was appraised at $418,250. 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.)

(a) Prepare entry S to eliminate stockholders' equity accounts of subsidiary

(b) Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill. (c) Prepare entry I to eliminate $99,000 income accrual for 2017 less $5,750 amortization recorded by parent using equity method.

(d) Prepare entry D to eliminate intra-entity dividend transfers (e) Prepare entry E to recognize current year amortization expense (f) Prepare entry S to eliminate beginning stockholders' equity of subsidiary - the retained earnings account has been adjusted for 2017 income and dividends. Entry *C is not needed because equity method was applied. (g) Prepare entry A to recognize allocations relating to investment - balances shown here are as of beginning current year (original allocation less excess amortizations for the prior period). (h) Prepare entry I to eliminate $151,250 income accrual less $5,750 amortization recorded by parent during 2018 using equity method.

(i) Prepare entry D to eliminate intra-entity dividend transfers (j) Prepare entry E to recognize current year amortization expense