Assume that Chapman Company acquired Abernethy€™s common stock for $490,000 in cash. As of January 1, 2011, Abernethy€™s land had a fair value of $90,000, its buildings were valued at $160,000, and its equipment was appraised at $180,000. Chapman uses the equity method for this investment. Prepare consolidation worksheet entries for December 31, 2011, and December 31, 2012.
Chapman Company obtains 100 percent of Abernethy Company€™s stock on January 1, 2011. As of that date, Abernethy has the following trial balance:

During 2011, Abernethy reported income of $80,000 while paying dividends of $10,000. During
2012, Abernethy reported income of $110,000 while paying dividends of$30,000.

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Debit Credit 50,000 Accounts payable Accounts receivable Additional paid-in capital Buildings (net) (4-year life) Cash and short-term investments Common stock Equipment (net) (5-year life) Inventory . Land Long-term liabilities (mature 12/31/14) 40,000 120,000 60,000 200,000 80,000 . 50,000 250,000 150,000 100,000 d earnings, 1/1/11 Supplies 10,000 $600000 $600,000