Balance sheet and income effects of alternative methods of accounting for investments.

On January 1 , Trusco acquired common stock of USP Company. At the time of acquisition, the book value and the market value of USP's net assets were $400 million. During the current year, USP earned $50 million and declared dividends of $30 million. Indicate the amount shown for Investment in USP on the balance sheet on December 31 and the amount of income Trusco would report for the year related to its investment under the assumption that Trusco did the following:

a. Paid $40 million for a 10 percent interest in USP and uses the market value method for securities available for sale. The market value of USP on December 31 was $400 million.

b. Same as part a except that the market value of USP on December 31 was $390 million.

c. Paid $45 million for a 10 percent interest in USP and uses the market value method for securities available for sale. The market value of USP on December 31 was $450 million.

d. Paid $120 million for a 30 percent interest in USP and uses the equity method.

e. Paid $160 million for a 30 percent interest in USP and uses the equity method. The firm neither amortizes any goodwill nor finds it impaired.