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Chapman Company obtains 100 percent of Abernethy Companys stock on January 1, 2017. As of...

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Accounting

Chapman Company obtains 100 percent of Abernethy Companys stock on January 1, 2017. As of that date, Abernethy has the following trial balance:

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During 2017, Abernethy reported net income of $124,000 while declaring and paying dividends of $16,000. During 2018, Abernethy reported net income of $164,750 while declaring and paying dividends of $60,000. Assume that Chapman Company acquired Abernethys common stock for $756,500 in cash. As of January 1, 2017, Abernethys land had a fair value of $93,100, its buildings were valued at $194,800, and its equipment was appraised at $366,250. Chapman uses the equity method for this 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.)

Debit Credit $ 50,900 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 12/31/20) Retained earnings, 1/1/17 Supplies $ 40,400 50,000 128,000 68,750 250,000 407,500 119,000 82,000 171,500 338,850 15,600 Totals $861,250 861,250

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