On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's voting stock for $288,000. Birch reported a $300,000 book value and the fair value of the non-controlling interest was $72,000 on that date. Then, 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 non-controlling 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 remaining life.

These companies report the following financial information. Investment income figures are not included.

Assume that each of the following questions is independent:
a. 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?
b. What is the consolidated net income for this business combination for 2014?
c. What is the net income attributable to the non-controlling interest in 2014?
d. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following unrealized gross profits at the end of each year:
DateAmount
12/31/12..................$10,000
12/31/13..................16,000
12/31/14..................25,000
What is the realized income of Birch in 2013 and 2014, respectively?

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2012 2013 2014 Sales Birch Company. . Cedar Company . .. . . . . . . . . . . . . . $415,000 200,000 Not available $545,000 280,000 160,000 $688,000 400,000 210,000 Expenses $310,000 160,000 $420,000 220,000 150,000 3 $510,000 335,000 180,000 Dividends declared $ 20,000 10,000 $ 40,000 20,000 2,000 $ 50,000 20,000 10,000