Debit 5 44,300 137,000 Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Accounts payable. Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life)) Credit $ 59,300 50,000 Cash and short-term investments 73,750 Common stock 250,000 Equipment (net) (5-year remaining life) 262,500 Inventory 126,500 Land 100,500 Long-term liabilities (mature 12/31/23). Retained earnings, 1/1/20 176,000 227,850 Supplies 18,600 Totals $763,150 $763,150 During 2020, Abernethy reported net income of $96,000 while declaring and paying dividends of $12,000. During 2021, Abernethy reported net income of $141,000 while declaring and paying dividends of $45,000. Assume that Chapman Company acquired Abernethy's common stock by paying $670,850 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment. Prepare the consolidation worksheet entries for December 31, 2020, and December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries 1 5 6 7 8 11 > Prepare entry S to eliminate stockholders' equity accounts of subsidiary. Consolidation Worksheet Entries 1 2 5 6 7 8 11 Prepare entry A to recognize goodwill portion of the original acquisition fair value. Note: Enter debits before credits. Date December 31, 2020 Accounts Debit Credit Land Buildings Goodwill Equipment Investment in Abernethy 10,800 61,900 79,750 29,000 123,450 Record entry Clear entry view consolidation entries Consolidation Worksheet Entries < 2 3 5 6 7 8 11 Prepare entry I to eliminate intra-entity income accrual for the current year based on the parent's usage of the partial equity method. Note: Enter debits before credits. Date December 31, Accounts Equity in subsidiary earnings 2020 Investment in Abernethy Debit Credit 86,325 86,325 Consolidation Worksheet Entries 1 2 3 4 5 6 7 8 11 > Prepare entry D to eliminate intra-entity dividend transfers. Note: Enter debits before credits. Date December 31, 2020 Accounts Debit Credit Investment in Abernethy 12,000 Dividends declared 12,000 > 2 3 4 5 6 7 8 11 > Prepare entry E to recognize 2020 amortization expense. Note: Enter debits before credits. Date December 31, Accounts Debit Credit Depreciation expense 15,475 2020 Buildings 15,475 Equipment 2,800 Depreciation expense 2,800 Consolidation Worksheet Entries < 2 3 5 6 7 8 11 Prepare entry *C to convert parent company figures to equity method. Note: Enter debits before credits. Date December 31, 2021 Accounts Debit Credit Record entry Clear entry view consolidation entries < 2 3 4 5 6 7 8 11 11 Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. Note: Enter debits before credits. Worksheet Entries < 1 2 3 5 6 7 8 11 Prepare entry A to recognize original goodwill balance. Worksheet Entries < 1 4 5 6 7 8 6 10 11 > Prepare entry I to eliminate Intra-entity Income accrual for the current year. < 1 4 5 6 7 8 9 10 10 Prepare entry D to eliminate Intra-entity dividend transfers. Note: Enter debits before credits. Date December 31, 2021 11 > Accounts Debit Credit Worksheet Entries < 1 4 5 6 7 8 9 Prepare entry E to recognize 2021 amortization expense. Note: Enter debits before credits. 10 10 11 No 1 Answer is not complete. Date December 31, 202 Common stock-Abernethy Accounts Additional paid-in capital-Abernethy Retained earnings-Abernethy-1/1/20 Investment in Abernethy 2 December 31, 202 Land Buildings Goodwill Equipment Investment in Abernethy Debit Credit 250,000 50,000 227,850 527,850 10,800 61,900x 79,750 29,000 123,450 x 3 December 31, 202 Equity in subsidiary earnings 86,325 Investment in Abernethy 86,325 4 December 31, 202 Investment in Abernethy Dividends declared 12,000 12,000 5 December 31, 202 Depreciation expense 15,475 15,475 Buildings Equipment 2,800 Depreciation expense 2,800