Potter Corporation buys 30% of Sunshine Supply Company on January 1, 2017, for

$300,000. The equity method of accounting is to be used. Sunshines net assets on

that date were $750,000. Any excess of cost over book value is attributable to a

customer list with a 10-year remaining life. Sunshine immediately begins supplying

inventory to Potter as follows:

Year	Cost to Sunshine	Transfer Price	Sunshines Gross Profit %	Amount Held By Potter at Year-end (at transfer price)
2017	$70,000	$100,000	30%	$25,000
2018	$96,000	$150,000	36%	$45,000

Inventory held at the end of one year by Potter is sold at the beginning of the next.

Sunshines net income was $80,000 for 2017 and is $110,000 for 2018. Sunshine

paid dividends of $30,000 each year.

Required:

Prepare all of Potters entries for 2017 and 2018 related to its investment in Sunshine.

Account Title	Debit	Credit
********2017********
********2018********