On January 1, 2017, Alison, Inc. paid $85,700 for a 40 percent interest in the common stock of Holister Corporation. This investee had assets with a book value of $256,000 and liabilities of $83,500. A Holister patent with a book value of $9,800 was actually worth $20,300. This patent had a remaining life of six years. Any additional cost excess associated with this acquisition was attributed to goodwill. During 2017, Holister had revenue of $48,000 and declared and paid dividends of $16,000. In 2018, it had revenue of $52,000 and dividends of $21,000. During 2018, the fair value of Allison's investment in Holister increased from $99,100 to $105,100.

to. Assuming Alison uses the equity method, what balance should appear in the investment account in Holister as of December 31, 2018?

b. Assuming Alison uses fair value accounting, what income from the Holister investment should be reported for 2018?

Answer rating: 100% (QA)

ANSWER AND EXPLANATION Refer to image a b Assumung Alison uses the equity method balance that sho... View the full answer