January 1, 2020, ABC Ltd. elects to make a long-term investment and purchases 5,000 shares of XY Company for $5.50 per share. This represents 25% of the voting shares and results in significant influence. The net income for XY Company in 2020 is $50,000. XY Company declared and paid $5,000 in dividends on December 31, 2020. In 2021, XY Company had an operating loss of $30,000 and no dividends were declared. In 2021, it was determined that goodwill was impaired by 20%.

XY Company had the following assets and liabilities at cost and fair market value on January 1, 2020:

	Cost	Market
Cash	15,000	15,000
Accounts Receivable	10,000	10,000
Inventory	10,000	8,000
Capital Assets, net	100,000	130,000
	135,000	163,000
Liabilities	69,500	69,500

Assume that the capital assets have 10 years of life remaining at January 1, 2020 and are amortized using the straight-line method.

Required 1: Prepare a goodwill schedule (also known as a purchase price discrepancy schedule) for this investment.Include the year of acquisition and columns for the subsequent years.

Required 2: Prepare all of the journal entries from January 1, 2020 to December 31, 2021.

Required 3: What is the balance in the investment (asset) account at December 31, 2021?