Required:

1. Determine the amount of goodwill, if any, that was included in Snoopy's purchase of Woodstock.

2. Prepare all appropriate journal entries related to the investment during for 2018 and 2019.

3. Prepare the entry to record the sale of the investment on January 1, 2020.

On October 1, 2018, Snoopy Corporation bought 40% of the outstanding common stock of Woodstock Company for $4,000,000 cash and achieved significant influence. At the date of acquisition of the stock, Woodstock's net assets had a total fair value of $8,500,000 and a book value of $6,800,000. The fair value and the book value of Woodstock's assets and liabilities were equal except for the following: Land undervalued by $500,000 Patent undervalued by $200,000 Remaining useful life = 8 years Building undervalued by $1,000,000 Remaining useful life = 10 years Woodstock earned $150,000 during 2018 and paid cash dividends of $50,000. The income was earned evenly throughout the year and the dividends were paid in equal amount ($12,500) in each quarter of the year. In 2019, Woodstock earned $200,000 and paid cash dividends of $80,000. On January 1, 2020, Snoopy sold his investment in Woodstock for $4,150,000