A patent held by holister having a 12500 book value was

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Alison, Inc., paid $83,400 for a 40 percent interest in Holister Corporation's common stock. This investee had assets with a book value of $267,000 and liabilities of $100,000. A patent held by Holister having a $12,500 book value was actually worth $36,500. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2012, Holister earned income of $42,500 and paid dividends of $14,000. In 2013, it had income of $72,700 and dividends of $19,000. During 2013, the fair value of Allison's investment in Holister had risen from $94,400 to $105,880. a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2013? Investment in Holister $ b. Assuming Alison uses the fair-value option, what income from the investment in Holister should be reported for 2013? Investment income $.

Reference no: EM13483505

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