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Problem 3-19 (LO 3-3a)

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

	Debit			Credit
Accounts payable				$	51,900
Accounts receivable	$	43,100
Additional paid-in capital					50,000
Buildings (net) (4-year remaining life)		175,000
Cash and short-term investments		75,500
Common stock					250,000
Equipment (net) (5-year remaining life)		439,500
Inventory		127,000
Land		116,500
Long-term liabilities (mature 12/31/20)					170,500
Retained earnings, 1/1/17					464,900
Supplies		10,700
Totals	$	987,300		$	987,300

During 2017, Abernethy reported net income of $87,000 while declaring and paying dividends of $11,000. During 2018, Abernethy reported net income of $122,500 while declaring and paying dividends of $55,000.

Assume that Chapman Company acquired Abernethys common stock for $873,250 in cash. As of January 1, 2017, Abernethys land had a fair value of $129,800, its buildings were valued at $243,800, and its equipment was appraised at $403,750. 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.)

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