okintrencesOn January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation's common stock. This investee hadassets with a book value of $290,500 and liabilities of $117,000. A patent held by Holister having a $13,600 book value was actuallyworth $31,600. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed togoodwill. During 2020, Holister earned income of $40,700 and declared and paid dividends of $14,000. In 2021, it had income of$70,000 and dividends of $19,000. During 2021, the fair value of Allison's investment in Holister had risen from $95,380 to $106,180.a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31,2021?b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?a. Investment in Holisterb. Inve ment income

Name: okintrencesOn January 1, 2020, Alison, Inc., paid $83,800 for a 40 pe
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Description: okintrencesOn January 1, 2020, Alison, Inc., paid $83,800 for a 40 percent interest in Holister Corporation's common stock. This investee hadassets with a book value of $290,500 and liabilities of $117,000. A patent held by Holister having a $13,600

Equity method :The equity method is an accounting approach used by companies to account for their…

Business

Accounting

a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2021? b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?

a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2021? b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2021?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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