Jersey Company purchased 80 percent of the common stock of Briar Company at the beginning of the current year. On the date of acquisition, Briar Company reported common stock outstanding of \(\$ 80,000\) and retained earnings of \(\$ 140.000\), and Jersey reported common stock outstanding of \(\$ 350,000\) and retained earnings of \(\$ 520,000\).

During the first year of ownership Briar Company reported net income of \(\$ 35.000\) and paid dividends of \(\$ 15,000\). Jersey reported earnings from its separate operations of \(\$ 95,000\) and paid dividends of \(\$ 46,000\). Jersey uses the equity method in accounting for its investment in Briar.

\section*{Required}

a. Assuming Jersey Company purchased the stock for \(\$ 176,000\), compute the following:

(1) Consolidated net income for the year.

(2) The balance in the investment account at year-end.

(3) Income assigned to noncontrolling interest in the consolidated income statement for the year.

b. Assume Jersey Company purchased the stock for \(\$ 216,000\) and that \(\$ 30,000\) of the differential is attributed to depreciable assets with an economic life of eight years at the date of acquisition. At the end of the year, management reviewed the portion of the differential assigned to goodwill and concluded goodwill had been impaired and should be reported at \(\$ 2,000\). Compute the following:

(1) Consolidated net income for the year.

(2) The balance in the investment account at year-end.

(3) Income assigned to noncontrolling interest in the consolidated income statement for the year.