Carpenter Company has the following balance sheet on December 31, 2015:

The investment in Hinckley Company account reflects the original cost of an 80% interest (40,000 shares) purchased on January 1, 2012. On the date of the purchase, Hinckley stockholders€™ equity has a book value of $150,000. Hinckley€™s other book values approximate fair values, except for a machine with a 5-year remaining life that is undervalued by $20,000. Any additional excess is attributed to goodwill. A review of Hinckley€™s past financial statements reveals the following:

Carpenter sells 2,000 shares of Hinckley common stock on January 1, 2016, for $40,000.
Required
Prepare the necessary entries on Carpenter€™s books to account accurately for the sale of the 2,000 Hinckley shares. Provide a determination and distribution of excess schedule along with all other necessary computations as support.

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Assets Liabilities and Equity $100,000 Investment in Hinckley Equity: Property, plant, and equipment (net). Total assets... .. . . edrnings.100,000 600,000 390,000 $700,000 . . Total liabilities and equity $700,000 . Income Dividends Paid 10,000 25,000 40,000 35,000 5,000 5,000 5,000 5,000 $20,000 2012 2014.. 2015 $110,000