EXERCISE 4-1 Parent Company Entries, Liquidating Dividend LO 2 Perey Company purchased 80% of the outstanding voting shares of Song Company at the beginning of 2014 for $387,000. At the time of purchase, Song Company's total stockholders' equity amounted to $475,000. Income and dividend distributions for Song Company from 2014 through 2016 are as follows: 2016 Net income (loss) Dividend distribution 2014 563,500 25,000 2015 $52,500 50,000 (555,000) 35,000 Required: Prepare journal entries on the books of Perey Company from the date of purchase through 2016 to account for its investment in Song Company under each of the following assumptions: A. Percy Company uses the cost method to record its investment. B. Percy Company uses the partial equity method to record its investment. C. Percy Company uses the complete equity method to record its investment. The difference between book value of equity acquired and the value implied by the purchase price was attributed solely to an excess of market over book values of depreciable assets, with a remaining life of 10 years