Problem 3-21 (Static) (LO 3-3c) Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Debit Credit $ 50,000 $ 40,000 50,000 120,000 60,000 250,000 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock by paying $520,000 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 X 1 Prepare entry S to eliminate stockholders' equity accounts of subsidiary. 11 > 2 Prepare entry A to recognize goodwill portion of the original acquisition fair value. iary. 3 Prepare entry I to eliminate intra-entity income accrual for the current year based on the parent's usage of the partial equity method. 4 Prepare entry D to eliminate intra-entity dividend transfers. Credit 5 Prepare entry E to recognize 2020 amortization expense. Note : = journal entry has been entered Record entry Clear entry view consolidation entries Problem 3-21 (Static) (LO 3-3c) Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Debit Credit $ 50,000 $ 40,000 50,000 120,000 60,000 250,000 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock by paying $520,000 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 6 Prepare entry *C to convert parent company figures to equity method. 11 > 7 Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. iary. 8 Prepare entry A to recognize original goodwill balance. 9 Prepare entry I to eliminate Intra-entity Income accrual for the current year. Credit 10 Prepare entry D to eliminate Intra-entity dividend transfers. 11 Prepare entry E to recognize 2021 amortization expense. Note : = journal entry has been entered Record entry Clear entry view consolidation entries Problem 3-21 (Static) (LO 3-3c) Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that date, Abernethy has the following trial balance: Debit Credit $ 50,000 $ 40,000 50,000 120,000 60,000 250,000 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year remaining life) Cash and short-term investments Common stock Equipment (net) (5-year remaining life) Inventory Land Long-term liabilities (mature 12/31/23) Retained earnings, 1/1/20 Supplies Totals 200,000 90,000 80,000 150,000 100,000 10,000 $600,000 $ 600,000 During 2020, Abernethy reported net income of $80,000 while declaring and paying dividends of $10,000. During 2021, Abernethy reported net income of $110,000 while declaring and paying dividends of $30,000. Assume that Chapman Company acquired Abernethy's common stock by paying $520,000 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 2 3 4 5 6 7 8 11 > Prepare entry S to eliminate stockholders' equity accounts of subsidiary. Note: Enter debits before credits. Accounts Debit Credit Date December 31, 2020 Record entry Clear entry view consolidation entries