Chapman Company obtains 100 percent of Abernethy Company’s stockon January 1, 2017. As of that date, Abernethy has the followingtrial balance:
| Debit | | Credit |
| Accounts payable | | | | $ | 57,700 |
| Accounts receivable | $ | 45,000 | | | |
| Additional paid-in capital | | | | | 50,000 |
| Buildings (net) (4-yearremaining life) | | 124,000 | | | |
| Cash and short-terminvestments | | 68,250 | | | |
| Common stock | | | | | 250,000 |
| Equipment (net) (5-yearremaining life) | | 327,500 | | | |
| Inventory | | 103,000 | | | |
| Land | | 106,000 | | | |
| Long-term liabilities (mature12/31/20) | | | | | 183,500 |
| Retained earnings, 1/1/17 | | | | | 252,350 |
| Supplies | | 19,800 | | | |
| Totals | $ | 793,550 | | $ | 793,550 |
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During 2017, Abernethy reported net income of $101,000 whiledeclaring and paying dividends of $13,000. During 2018, Abernethyreported net income of $152,000 while declaring and payingdividends of $39,000.
Assume that Chapman Company acquired Abernethy’s common stockfor $696,650 in cash. As of January 1, 2017, Abernethy’s land had afair value of $124,300, its buildings were valued at $200,000, andits equipment was appraised at $305,750. Chapman uses the equitymethod for this investment.
Prepare consolidation worksheet entries for December 31, 2017,and December 31, 2018. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.)
