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Use the following information for H5-1 and H5-2. On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company for

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Use the following information for H5-1 and H5-2. On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company for $450,000. Fair value of noncontrolljng interest at the date of acquisition is $116,500. Sen's stockholders' equity on January 1, 2018, was as follows: Common stock, $20 par $200,000 Additional paid-in capital 100,000 Retained earnings 100,000 Accumulated OCI 25,000 Differences between book value and fair value of the identiable net assets of Sen Company on January 1, 2018, were limited to the following: Book value Fair value Inventories (FIFO) $ 40,000 $ 45,000 Building (net) (remaining life 10 years) 180,000 150,000 Both Pen and Sen used the straight-line method for depreciation. Goodwill was unimpaired as of December 31, 2018. However, a goodwill impairment of $20,000 was realized in 2019. For the two scal years ended December 31, 2019, Sen had net income and dividends (declared and paid on December 28 each year) as follows: Net income Dividends Other Comprehensive Income (Loss) 2018 $ 80,000 $40,000 8,000 2019 120,000 70,000 (10,000) HS-l (i) Calculate total amount of goodwill and the amount of goodwill to controlling and noncontrolling interest. (ii) Calculate equity in net income of Sen attributable to controlling and noncontrolling interest in 2018. (iii) Prepare journal entries for Pen to record under the equity method of accounting the dividends and operating results of Sen in 2018. (ii) Prepare the working paper entries (in journal entry format) for Pen Corporation and subsidiary for the year ended December 31, 2018. H5 -2 (i) Calculate equity in net income of Sen attributable to controlling and noncontrolling interest in 2019. (ii) Prepare journal entries for Pen to record under the equity method of accounting the dividends and operating results of Sen in 2019. (iii) Prepare the working paper entries (in journal entry format) for Pen Corporation and subsidiary for the year ended December 31, 2019

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