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Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2014. As of that...

Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2014. As of that date, Abernethy has the following trial balance:

  

Debit Credit
  Accounts payable $ 52,400   
  Accounts receivable $ 48,600
  Additional paid-in capital 50,000   
  Buildings (net) (4-year life) 179,000
  Cash and short-term investments 61,250
  Common stock 250,000   
  Equipment (net) (5-year life) 260,000
  Inventory 121,500
  Land 105,000
  Long-term liabilities (mature 12/31/17) 174,500   
  Retained earnings, 1/1/14 264,650   
  Supplies 16,200
  
     Totals $ 791,550 $ 791,550   
  

  

     During 2014, Abernethy reported net income of $86,000 while declaring and paying dividends of $11,000. During 2015, Abernethy reported net income of $124,500 while declaring and paying dividends of $47,000.

Assume that Chapman Company acquired Abernethy’s common stock for $675,160 in cash. Assume that the equipment and long-term liabilities had fair values of $284,350 and $142,140, respectively, on the acquisition date. Chapman uses the initial value method to account for its investment.

Prepare consolidation worksheet entries for December 31, 2014, and December 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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