On january 1 2012 alison inc paid 91200 for a 40 percent

Reference no: EM13590947

On January 1, 2012, Alison, Inc., paid $91,200 for a 40 percent interest in Holister Corporation's common stock. This investee had assets with a book value of $268,500 and liabilities of $98,500. A patent held by Holister having a $9,500 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 $42,200 and paid dividends of $14,000. In 2013, it had income of $62,750 and dividends of $19,000. During 2013, the fair value of Allison's investment in Holister had risen from $104,280 to $108,880.

Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2013?

b.Assuming Alison uses the fair-value option, what income from the investment in Holister should be reported for 2013?

Reference no: EM13590947

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