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1, Fillmore Electronics, Inc., acquired 30% of the voting stock of Heart Radio Media for S77 million cash. In year 1, Heart Radio Media had

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1, Fillmore Electronics, Inc., acquired 30% of the voting stock of Heart Radio Media for S77 million cash. In year 1, Heart Radio Media had a net income of $90 million and paid a cash dividend of $40 milion. The investment had a market value of $97 million at the end of the year. Requirements 1. Using the equity method, show the effects of the three transactions-acquisition and Heart Radio Media's net income and cash dividend-on the accounts of Fillmore Electronics. Use the balance-sheet-equation format 2. Assume that Fillmore Electronics could use the market-value method for this investment and that it classified the investment as an available-for-sale security. Show the effects of the three transactions on the accounts of Fillmore Electronics. Use the balance-sheet-equation format Requirement 1. Using the equity method, show the effects of the three transactions-acquisition and Heart Radio Media's net income and cash dividend-on the accounts of Filmore Electronics. Use the balance-sheet-equation format. (Enter amounts in millions. Use a minus sign or parentheses for decreases and leave any unused cells blank) Equity Method Liabilities and Assets Stockholders Equity (SE) In millions Cash InvestmentsLiabilities SE Net income of Heart Radio Dividends from Heart Radio Increase in Heart Radio market value Effects for the year Requirement 2. Assume that Fillmore Electronics could use the market-value method for this investment and that it classified the investment as an available-for-sale security. Show the effects of the three transactions on the accounts of Fillmore Electronics. Use the balance-sheet-equation format. (Enter amounts in millions. Use a minus sign or parentheses for decreases and leave any unused cells blank.) Market Value Method Liabilities and Stockholders' Equity (SE) Assets In milions Cash + InvestmentsLiabilities+ SE Net income of Heart Radio Dividends from Heart Radio Increase in Heart Radio market value Effects for the year

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