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				$	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 12/31/20)					183,500
Retained earnings, 1/1/17					252,350
Supplies		19,800
Totals	$	793,550		$	793,550

During 2017, Abernethy reported net income of $101,000 while declaring and paying dividends of $13,000. During 2018, Abernethy reported net income of $152,000 while declaring and paying dividends of $39,000.

Assume that Chapman Company acquired Abernethys common stock for $664,740 in cash. Assume that the equipment and long-term liabilities had fair values of $349,250 and $151,060, respectively, on the acquisition date. Chapman uses the initial value method to account for its 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.)

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

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

3. Prepare entry I to eliminate intra-entity dividend declarations recorded by parent as income.

4. Prepare entry E to recognize 2017 amortization expense.

5. Prepare entry *C to convert parent company figures to equity method by recognizing subsidiary's increase in book value for prior year [$80,000 net income less $10,000 dividend declaration] and excess amortizations for that period [$11,500].

6. Prepare entry S to eliminate beginning of year stockholders' equity accounts of subsidiary. The retained earnings balance has been adjusted for 2017 net income and dividends.

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

8. Prepare entry I to eliminate intra-entity dividend declarations recorded by parent as income.

9. Prepare entry E to recognize 2018 amortization expense.