On January 1, 2014, Alison, Inc. paid $95,200 for a 40 percent interest in the common stock of Holister Corporation. 

This investee had assets with a book value of $245,000 and liabilities of $75,500.

 A Holister patent with a book value of $12,600 was actually worth $53,100. 

This patent had a remaining life of six years. Any additional cost excess associated with this acquisition was attributed to goodwill. 

During 2014, Holister had revenue of $54,700 and declared and paid dividends of $18,000. 

In 2015, it had revenue of $61,200 and dividends of $23,000. 

During 2015, the fair value of Allison's investment in Holister increased from $109,880 to $113,460.

a.	Assuming Alison uses the equity method, what balance should appear in the investment account in Holister as of December 31, 2015?

b.	Assuming Alison uses fair value accounting, what income from the Holister investment should be reported for 2015?

Answer rating: 100% (QA)

a Assuming Alison uses the equity method the balance that should appear in the investment account in ... View the full answer