HI There, there is no solution for a problem that I am looking for. Advanced Accouting - Chapter 4, problem 30. Can you please assist? Thanks.

Posada Company acquired 7,000 of the 10,000 outstanding shares of Sabathia Company on January 1, 2013, for $840,000. The subsidiarys total fair value was assessed at $1,200,000 although its book value on that date was $1,130,000. The $70,000 fair value in excess of Sabathias book value was assigned to a patent with a 5-year remaining life.

On January 1, 2015, Posada reported a $1,085,000 equity method balance in the Investment in Sabathia Company account. On October 1, 2015, Posada sells 1,000 shares of the investment for $191,000. During 2015, Sabathia reported net income of $120,000 and declared dividends of $40,000. These amounts are assumed to have occurred evenly throughout the year.

a.

How should Posada report the 2015 income that accrued to the 1,000 shares prior to their sale? (Do not round your intermediate calculations.)

b.	What is the effect on Posadas financial statements from this sale of 1,000 shares? (Do not round your intermediate calculations.)