Assume that Chapman Company acquired Abernethy's common stock by paying $520,000 in cash. All of Abernethy's accounts are estimated to have a fair value approximately equal to present book values. Chapman uses the partial equity method to account for its investment.

Prepare the consolidation worksheet entries for December 31, 2012, and December 31, 2013.

Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2012. As of that date, Abernethy has the following trial balance:

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Debit Credit S 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) $ 40,000 50,000 120,000 60,000 250,000 200,000 90,000 80,000 Long-term liabilities (mature 12/31/15) Retained earnings, 1/1/12 Supplies 150,000 100,000 10,000 $600,000 600,000