3 points On January 1, 20X1. Jolley Corp. paid $400,000 for 20% of the voting common stock of Tige Co. This investment gave Jolley significant influence over Tige. On January 1, 20x1, the total book value of Tige was $800,000 and the fair value of all assets and liabilities on Tige's books equals their book value except for a building which has a carrying value of $150,000 and a fair value of $225,000. The building's remaining useful life is ten years. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Tige reported net income of $200,000 in 20X1. Tige paid cash dividends of $25,000 in 20X1. The fair value of Jolley's investment in Tige was $500,000 as of December 31, 20X1. Show you work, label all amounts, and show the related calculations for those amounts. Journal entries are not required and will not be graded if provided. If you do prepare journal entries, these must be supplemented with a schedule showing how the required amounts are calculated in total. a. What is the effect of Jolley's investment in Tige Co. on Jolley's net income for the year ended December 31,20X1? share of NI 200,000 X 0.2 - 40,000 Investpent in Tige Co. In crease an account by 40,000 and in crease investment revenue by 40,000 Dividends = 284 000 x0.2 7 Fico b. What amount should Jolley report in its balance sheet as its Investment in Tige. Co at December 31, 20X1? 225.000 -150.000 75.000 75.0004/10=7,000 Choodwill - 1 Investment affiliate Purchase 400.000 Share of NI 40.000 Amortization 7500 X Dividends 5.000 Balance 427.500