Question: On December 3 1 , 2 0 2 2 , Akron, Incorporated, purchased 5 percent of ZIp Company's common shares on the open market in

On December

31, 2022,

Akron, Incorporated, purchased

5

percent of ZIp Company's common shares on the open market in exchange

for $

15, 750 .

On December

31, 2023,

Akron, Incorporated, acquires an additional

25

percent of ZIp Company's outstanding common

stock for $

97, 250 .

During the next two years, the following Information is avallable for ZIp Company:

At December

31, 2023,

ZIp reports a net book value of $

282, 000 .

Akron attributed any excess of Its

30

percent share of Zip's falr over

book value to Its share of ZIp's franchise agreements. The franchise agreements had a remaining life of

10

years at December

31,

2023 .

Required:

.

Assume Akron applies the equity method to Its Investment In ZIp account:

What amount of equity Income should Akron report for

2024 ?

On Akron's December

31, 2024,

balance sheet, what amount is reported for the Investment in Zip account?

.

Assume Akron uses falr

-

value accounting for Its Investment in Zlp account:

What amount of Income from its Investment in Zip should Akron report for

2024 ?

On Akron's December

31, 2024,

balance sheet, what amount is reported for the Investment in Zip account?

common shares on the open market in exchange for $15,750. On December

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