1. Topic: com Complete equity method, first and second years LO1 my Corporation acquired the voting stock of Sherman Company on and 500,000 in cash. Sherman's book value at the date of acquisition was $100,00 assets were reported at amounts approximating fair value. However, it na unreported identifiable intangibles (5-year life, straight-line), valued at $150,000 Sherman reported net income of $35,000 and declared and paid dividends of 52.0 2020, Sherman reported net income of $40.000 and declared and paid dividends Goodwill from this acquisition was not impaired in 2019 but was impaired by $3,000 Penny uses the complete equity method to report its investment in Sherman on its own book "pany on January 1, 2019 for was $100,000. Sherman's net wever, it had previously ed at $150,000. During 2019, d paid dividends of $2,000. During ared and paid dividends of $2,000. Required a. Calculate equity in net income of Sherman, reported on Penny's books, for 2019 and 2020. b. Calculate the December 31, 2019 and December 31, 2020 balance for Investment in Sherman, reported on Penny's books. ANS: 2019 2020