On 1/1/2012, Tarheel Inc. purchased 40% of Bulldog Inc.s common stock for $50,000 in cash. At the date of purchase, Bulldog Inc.s book value of total assets equaled $200,000 and their book-value of total liabilities equaled $100,000. Bulldog Inc. owned a basket- ball arena that with a book value of $50,000 and a fair market value of $60,000. The remaining useful life of the basketball arena is 10 years. Bulldogs net income in 2012 was $10,000, and it distributed $5,000 in cash dividends at the end of 2012. On 1/1/2013, after serious considera- tions, Tarheel Inc. reached the conclusion that Bulldog Inc. will underperform in future years and sold all of its shares as a result. The company received $45,000 in cash for Bulldogs shares.

a. Record Tarheels journal entries related to the purchase transaction on 1/1/2012. b. How much goodwill was created as a result of the purchase transaction? c. Record all of Tarheels journal entries related to its investment in Bulldog during 2012, subsequent to purchase. d. What is the balance of the investment in Bulldog on Tarheels balance sheet on 12/31/2012? e. Record Tarheels journal entries related to the sale of the Bulldog shares on 1/1/2013.