On 1/1/16 SOAPCO purchased 40% of the voting stock of Habitrail Inc for $600,000. On that date the book value of Habitrails (total) net assets to $1,200,000 and the fair market value of all balance sheet items were equal to their book value except for the following:

BV FMV

Inventory $100,000 $150,000

Land 60,000 50,000

PP&E (net) 200,000 350,000

The PP&E is depreciated straight line over a 10-year remaining life.

In 2016 (2017) Habitrail paid total cash dividends of $25,000 ($30,000) and reported net income of $60,000 (loss of $20,000). Half of the inventory was in each year and the land was not written down. SOAPCO performed impairment tests for goodwill in both years, resulting in a $10,000 write down of goodwill in 2017.

Given this information, please calculate the value of any goodwill related to the Investment in Habirtail, produce the journal entries for both years on SOAPCOs books and calculate the book value of SOAPCOs Investment in Habitrail on 12/31/16 and 12/31/17.