Problem 4-1 On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a long-term investment. The purchase price of $4,954,500 was paid in cash. At the purchase date, the balance sheet of Singer Company included the following: Current assets $2,935,000 Long-term assets 3,884,600 Other assets 758,900 Current liabilities 1,571,600 Common stock, $20 par value 1,998,200 Other contributed capital 1,887,800 Retained earnings 1,614,100 Additional data on Singer Company for the four years following the purchase are: 2011 2012 2013 2014 Net income (loss) $2,003,400 $476,800 ($180,500 ) ($321,700 ) Cash dividends paid, 12/30 501,500 501,500 501,500 501,500 Prepare journal entries under each of the following methods to record the purchase and all investment-related subsequent events on the books of Perelli Company for the four years, assuming that any excess of purchase price over equity acquired was attributable solely to an excess of market over book values of depreciable assets (with a remaining life of 15 years). (Assume straight-line depreciation.)(a) Your answer is partially correct. Try again. Perelli uses the cost method to account for its investment in Singer. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 2011 Investment in Subsidiary 4,954,500 Cash 4,954,500 (To record the investment) Cash 451,350 Dividend Income 451,350 (To record dividend income) 2012 Cash 451,350 Dividend Income 451,350 2013 Cash 451,350 Dividend Income 451,350 v 2014 [Cash 451,350 Dividend Income Investment in Subsidiary