Exercise 4 (LO 3) Sale of interest, control maintained. Carpenter Company has the following balance sheet on December 31, 2015: Assets $100,000 Current assets Investment in Hinckley Company Property, plant, and equipment (net) Total assets Liabilities and Equity $100,000 Liabilities Equity: 200,000 Common stock ($10 par) $500,000 Retained earnings 100,000 400,000 $700,000 Total liabilities and equity .. 600,000 $700,000 The investment in Hinckley Company account reflects the original cost of an 80% interest (40,000 shares) purchased on January 1, 2012. On the date of the purchase, Hinckley stockholders' equity has a book value of $100,000. Hinckley's other book values approximate fair values, except for a machine with a 5-year remaining life that is undervalued by $100,000. Any additional excess is attributed to goodwill. A review of Hinckley's past financial statements reveals the following: Income 2012 2013 2014. 2015. $ 30,000 40,000 50,000 60,000 $180,000 Dividends Paid $ 10,000 10,000 10,000 10,000 $40,000 Total Carpenter sells 10,000 shares of Hinckley common stock on January 1, 2016, for $90,000. REQUIREMENTS 1. As of December 31, 2015, under the sophisticated equity method, what is the ending balance of the Investment in Hinckley Company account? 2. Prepare the necessary general journal entries on Carpenter's books to account accurately for the sale of the 10,000 Hinckley shares