1. Shine Corporation purchased 20 percent of the common stock of Ash Corporation on January 1, 2002, at $28,000 in excess of underlying book value. The excess is attributable to equipment with a remaining useful life of 2 years. At 01/01/2002, 01/01/2003, 01/01/2004, 12/31/2004, the fair values of Shine's investment in Ash are $1,000,000, $1,100,000, $1,080,000, $1,200,000 respectively. The companies reported the following operating results and dividends for the three years following the date of purchase: Shine Ash Operating Dividends Net income Dividends 2002 $1,000,000 $130,000 $400,000 $40,000 960,000 140,000 300,000 40,000 2004 1.200,000 140,000 500,000 22,000 Required: (a.) Compute the net income reported by Shine for each of the three years assuming Shine accounts for its investment in Ash using the fair value method. (6.) Compute the net income reported by Shine for each of the three years assuming Shine accounts for its investment in Ash using the equity method. income 2003 Answer: a) Fair Value Method: 2002: 2003: 2004: b) Equity Method: 2002: 2003: 2004