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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 $ 53,700
Accounts receivable $ 41,000
Additional paid-in capital 50,000
Buildings (net) (4-year remaining life) 184,000
Cash and short-term investments 77,250
Common stock 250,000
Equipment (net) (5-year remaining life) 400,000
Inventory 117,500
Land 107,500
Long-term liabilities (mature 12/31/23) 173,000
Retained earnings, 1/1/20 417,450
Supplies 16,900
Totals $ 944,150 $ 944,150

During 2020, Abernethy reported net income of $98,000 while declaring and paying dividends of $12,000. During 2021, Abernethy reported net income of $128,250 while declaring and paying dividends of $39,000.

Assume that Chapman Company acquired Abernethys common stock for $851,300 in cash. As of January 1, 2020, Abernethys land had a fair value of $124,200, its buildings were valued at $254,400, and its equipment was appraised at $378,500. Chapman uses the equity method for this investment.

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

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