Reference no: EM133073555

Question - On January 1, 2013, Pierce Inc purchased 15,000 shares of Marion company for $435,000 giving Pierce 10% ownership of Marion. On January 1, 2014, Pierce purchased an additional 30,000 shares (20 percent) for $1,000,000. This purchase gave Pierce the ability to exert significant influence on Marion. The original 10% investment was categorized as an available-for-sale security. Any excess of cost over book value acquired for either investment was attributed solely to goodwill.

Marion reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the year. Dividends are declared and paid in the same period.

Net Income

2013: $359,000

2014: $501,000

2015: $644,000

Cash Dividends (Paid quarterly)

2013: $107,000

2014: $132,500

2015: $149,000

On July 1, 2015, Pierce sells 9,000 shares of this investment for $40 per share, thus reducing its ownership from 30 to 24%. However, the company retains the ability to significantly influence Marion. Using the equity method and average book value to compute any loss or gain on sale, what amounts appear in Pierce's 2015 income statement?