On January 1, 2015, Fisher Corporation paid $2,290,000 for 35percent of the outstanding voting stock of Steel, Inc., andappropriately applies the equity method for its investment. Anyexcess of cost over Steel’s book value was attributed to goodwill.During 2015, Steel reports $720,000 in net income and a $100,000other comprehensive income loss. Steel also declares and pays$20,000 in dividends.
a.
What amount should Fisher report as its Investment in Steel onits December 31, 2015, balance sheet?
b.
What amount should Fisher report as Equity in Earnings of Steelon its 2015 income statement?
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