TRANSACTION LIST:

-1Prepare entry S to eliminate stockholders' equity accounts of subsidiary. -2Prepare entry A to recognize allocations in connection with acquisition-date fair values. -3Prepare entry I to eliminate intra-entity dividends. -4Prepare entry E to recognize 2020 amortization expense. -5Prepare entry *C to convert parent company figures to equity method. -6Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021. -7Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021. -8Prepare entry I to eliminate intra-entity dividends. -9Prepare entry E to recognize 2021 amortization expense.

TRANSACTION OPTIONS:

No journal entry required Accounts payable Accounts receivable Additional paid-in capital Buildings Cash and short-term investments Common stockAbernethy Common stockChapman Depreciation expense Dividend income Dividends declared Equipment Equity in subsidiary earnings Goodwill Interest expense Inventory Investment in Abernethy Investment in Chapman Land Long-term liabilities Retained earnings1/1/20 Retained earnings1/1/21 Supplies

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, 500 $ 44,100 50,000 166,000 79,250 250,000 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 292,500 100, 500 128,000 188,000 288,850 17,000 $827,350 $ 827,350 During 2020, Abernethy reported net income of $103,000 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $144,250 while declaring and paying dividends of $58,000. Assume that Chapman Company acquired Abernethy's common stock for $692,830 in cash. Assume that the equipment and long- term liabilities had fair values of $313,100 and $156,920, respectively, on the acquisition date. Chapman uses the Initial value method to account for its Investment. Prepare 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.) Prepare 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 fleld.) view transaction list Consolidation Worksheet Entries 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