The equity method for internal reporting purposes

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Reference no: EM13683335

On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock for $288,000. Birch reported a $300,000 book value and the fair value of the noncontrolling interest was $72,000 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for $104,000 when Cedar had a $100,000 book value and the 20 percent noncontrolling interest was valued at $26,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-year life.

These companies report the following financial information. Investment income figures are not included.
2012 2013 2014
Sales:
Aspen Company $ 415,000 $ 545,000 $ 688,000
Birch Company 200,000 280,000 400,000
Cedar Company Not available 160,000 210,000
Expenses:
Aspen Company $ 310,000 $ 420,000 $ 510,000
Birch Company 160,000 220,000 335,000
Cedar Company Not available 150,000 180,000
Dividends declared:
Aspen Company $ 20,000 $ 40,000 $ 50,000
Birch Company 10,000 20,000 20,000
Cedar Company Not available 2,000 10,000

If all companies use the equity method for internal reporting purposes, what is the December 31, 2013, balance in Aspen's Investment in Birch Company account?

Reference no: EM13683335

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