Bristol Corporation acquired 40 percent of the voting stock of Manchester Corporation on January 2,2013, for $3.2 million in cash. Manchester's balance sheet and estimated fair values of its assets and liabilities on January 2, 2013, are as follows:

In addition to its reported assets, Manchester has unreported franchise agreements (5-year life) valued at $1 million and brand names (indefinite life) valued at $2.2 million. Its property and equipment has a 20 year average remaining life. Manchester reported income of $1.8 million for 2013.
Required
a. How many shares of Manchester stock did Bristol acquire?
b. Compute Bristol's equity in Manchester's net income for 2013.

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MANCHESTER CORPORATION Balance Sheet January 2, 2013 (in thousands) Assets Cash and receivables. Book Value Fair Value __ _ $ 400 1,200 300 800 4,200 (1,300) $5,600 $ 400 800 300 2,000 1,500 Land Less: Accumulated depreciation .. . . Total assets Liabilities and Equity 900 3,000 500 1,000 800 (600) $900 3,000 Accumulated other comprehensive income. .$5,600