Question: On December 3 1 , 2 0 2 2 , Akron, Inc , purchased 5 % of Zip company's common shares on the open market

On December

31, 2022,

Akron, Inc

,

purchased

5 %

of Zip company's common shares on the open market in exchange for

16, 350 .

On December

31, 2023,

AjroAkron, Inc, acquires an additional

25 %

of Zip company's out standing common stock fostock for

96, 500 .

During the next

2

years

,

the following information is available for Zip company

.

Income. Div declared common stock

fair value

2022 . 327, 000

2023 82, 000 6, 600 386, 000

2024 86, 000 15, 900 475, 000

At December

31, 2023,

Zip reports a net book value of

292, 000 .

Akron attributed any excess of itit's

30 %

share of Zip's fair over book value to its share of Zips franchise agreements.

The franchise agreements has a remaining life of

10

years at December

31, 2923 .

.

Assume Akron applies the equity netmethod to its Investment in Zip account

1

What amount of equity income shoushould Akron report for

2024 ?

2 .

On Akron's December

31, 2024,

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

.

Assume AjroAkron uses fair

-

value accounting for its investment in Zip Account

1 .

what at amount of income from its investment in Zip should Akron report in

2024 ?

2 .

On Akron

'

s December

31, 2924,

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

1 .

Equity income.

2

Investment in Zip account.

1 .

Reported income

2 .

Investment in Zip account

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