Penn Corporation purchased 80 percent ownership of State Company on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of State. On January 1, 20X4, Penn sold 2,000 shares of State's stock for $75,000 to Nonaffiliated Company and recorded a $17,000 increase in additional paid-in capital. Trial balances for the companies on December 31, 20X4, contain the following data Penn Corporation Credit State Compan Debit Credit Debit 41,000 50,000 107,000 240,000 $36,000 70,000 127,000 650,000 169,800 207,000 24,000 25,000 23,000 Cash Accounts Receivable Inventory Buildings & Equipment Investment in State Company Cost of Goods Sold Depreciation Expense Other Expenses Dividends Declared Accumulated Depreciation Accounts Payable Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings Sales Income from State Total 97,000 19,000 29,000 18,000 169,000 148,200 185,000 200,000 72,000 265,000 277,000 15,600 $1,331,800 $1,331,800 $94,000 34,000 27,000 100,000 25,000 150,000 171,000 $601,000 601,000 State's net income was earned evenly throughout the year. Both companies declared and paid their dividends on December 31, 20X4 Penn uses the equity method in accounting for its investment in State