On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock for $438,000. Birch reported a $457,500 book value and the fair value of the noncontrolling interest was $109,500 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for $200,000 when Cedar had a $205,000 book value and the 20 percent noncontrolling interest was valued at $50,000. 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. Sales: Aspen Company Birch Company Cedar Company Expenses: Aspen Company Birch Company Cedar Company Dividends declared: Aspen Company Birch Company Cedar Company 2012 2013 2014 $632,500 $747,500 $822,500 416,900 261,250 327,250 Not available 185,900 292,600 $542,500 $522,500 $750,000 261,000 335,000 171,000 250,000 200,000 Not available $15,000 8,000 Not available $45,000 $ 55,000 15,000 6,000 15,000 2,000 Assume that each of the following questions is independent:

On January 1, 2016, Uncle Company purchased 80 percent of Nephew Company's capital stock for $512,000 in cash and other assets. Nephew had a book value of $626,000 and the 20 percent noncontrolling interest fair value was $128,000 on that date. On January 1, 2015, Nephew had acquired 30 percent of Uncle for $283,000. Uncle's appropriately adjusted book value as of that date was $910,000.   Separate operating income figures (not including investment income) for these two companies follow. In addition, Uncle declares and pays $30,000 in dividends to shareholders each year and Nephew distributes $4,000 annually. Any excess fair-value allocations are amortized over a 10-year period.     Year UncleCompany NephewCompany 2016 $ 138,000   $ 34,000   2017   203,000     51,800   2018   236,000     52,600       Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiary's income recognized by Uncle in 2018? What is the net income…

Belden, Inc. acquires 30 percent of the outstanding voting shares of Sheffield, Inc. on January 1, 2017, for $316,000, which gives Belden the ability to significantly influence Sheffield. Sheffield has a net book value of $796,000 at January 1, 2017. Sheffield's asset and liability accounts showed carrying amounts considered equal to fair values except for a copyright whose value accounted for Belden's excess cost over book value in its 30 percent purchase. The copyright had a remaining life of 16 years at January 1, 2017. No goodwill resulted from Belden's share purchase.   Sheffield reported net income of $192,000 in 2017 and $232,000 of net income during 2018. Dividends of $64,000 and $96,000 are declared and paid in 2017 and 2018, respectively. Belden uses the equity method.   On its 2018 comparative income statements, how much income would Belden report for 2017 and 2018 in connection with the company's investment in Sheffield? If Belden sells its entire investment in…

On January 1, 2018, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $200,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $20 per share. Marshall paid $30,000 to accountants, lawyers, and brokers for assistance in the acquisition and another $12,000 in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:                                       Marshall Company Book Value            Tucker Company Book Value Cash                                   $       60,000                                                 $ 20,000 Receivables                               270,000                                                   90,000   Inventory                                   360,000                                                 140,000 Land…