Equity Method with Basis Differences

On January $2,2011,$ Best Beverages acquired $35$ percent of the stock of Better Bottlers for

$$48$ million in cash. Best Beverages accounts for its investment using the equity method. At

the time of acquisition, Better Bottlers' balance sheet was as follows $($in millions$)$:

At the date of acquisition, valuation of Better Bottlers' assets and liabilities revealed

that its reported patents and trademarks $(16-$year life$)$ had a fair value of $$256$ million At the date of acquisition, valuation of Better Bottlers' assets and liabilities revealed

that its reported patents and trademarks $(16-$year life$)$ had a fair value of $$256$ million

and it had unrecognized brand names $(12-$year life$)$ worth $$14\mathrm{.}4$ million.

Several years later, Better Bottlers' December $31,2014$ retained earnings balance is $$40$

million. For $2014,$ it reported net income of $$4$ million and paid $$1,040,000$ in dividends.

For all answers below, enter the complete figures using all zeros. For example, $$1$

million should be entered as $1,000,000.$

$($a$)$ Prepare the $2014$ entries to report the above information on Best Beverages'

books. Note: Enter answers using all zeros. Do not abbreviate in millions or thousands.

$($b$)$ Calculate the Investment in Better Bottlers balance, reported on Best Beverages'

December $31,2014$ balance sheet.

Note: Enter answers using all zeros. Do not abbreviate in millions or thousands.