4 On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,232,700 in cash. The price paid was proportionate to Sellinger's total fair value, although at the acquisition date, Sellinger had a total book value of $1,490,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger's accounting records by $261,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $511,875 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: ints 02:21:31 2017 Net income Dividends declared $570,000 160,000 2018 $ 675,000 190,000 a. Show Palka's journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares. b. Prepare a schedule showing Palka's December 31, 2018, equity method balance for its Investment in Sellinger account. Answer is not complete. Complete this question by entering your answers in the tabs below. Required a Required B Show Palka's journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Debit Credit January 01, 2018 Cash 511,875 Additional paid-in capital 20,000 1 (Required A Required B Required A Required B Prepare a schedule showing Palka's December 31, 2018, equity (Amounts to be deducted should be indicated with a minus sig Initial value for acquisition Adjusted subsidiary net income 2017 Subsidiary dividends 2017 Adjusted fair value of newly acquired shares Adjusted subsidiary 2018 net income Subsidiary dividends 2018 Investment in Sellinger 12/31/18 $ 1,232,700 368,550 112,000 X 531,875 599,925 180,500 X $ 3,025,550