P Company paid $5,000,000 (cash) 2,000,000 (cash) for an 80% interest in s Company or 7/1/07) The OOK Values and fair values of S's assets and liabilities on the date of ac follows: abilities on the date of acquisition were as BV $400 $400 $800 $1,200 5800 $1,900 Cash Accounts Receivable Inventories Other Current Assets Land Building (10 year life) Patent (10 year life) Total Assets $100 $2,400 $400 $800 $1,400 $1.300 $7,600 $1,000 $1.200 $6,500 $400 $200 $400 $100 $1,000 $1,200 Accounts Payable Accrued Liabilities B/P (10 year maturity) Common Stock Retained Earnings Total $5,000 $1,000 $7,600 The company earned income of $240,000 ($20,000 per month) in 2007 and paid total dividends of $200,000 on October 1, 2007. Required 1) Compute the goodwill from the acquisition 2) Compute the Equity method Income from Sub. for 2007. 3) Record the Equity method journal entries for 2007. 4) Analyze the Investment Account at 12/31/07