Alpha acquired 30% of Beta's common shares on January 1, 2020 paying $80,000 in cash and issuing 1,500 shares to Beta's shareholders. The market value of each Alpha share is $21. The par value of Alpha's shares is $1. Beta's balance sheet as of January 1, 2020 and the fair value of Beta's assets and liabilities were as follows: BALANCE SHEET BETA-Book Value BETA-Fair Value Jan 1, 2020 Jan 1, 2020 Cash 62,000 62,000 Accounts receivable 7,000 7,000 Inventory 161,000 161,000 PPE net 20,000 57,000 Assets 250,000 287,000 15,000 15,000 Accounts payable LT Liabilities 22,000 22,000 Preferred shares 10,000 Common stock 120,000 Retained earnings 83,000 Liabilities+Equity 250,000 37,000 The useful life of the plant equipment is 10 years. During 2020, Beta's net income was $35,000 and Beta paid $10,000 in regular and $5,500 in preferred dividends. During 2021, Beta's net income was $55,000 and Beta paid $10,000 in regular and $2,500 in preferred dividends. Alpha immediately begins supplying inventory to Beta as follow: Year Cost to Alpha Transfer price 2020 70,000 Amount held by Beta at the end of the year 25,000 45,000 2021 100,000 150,000 96,000 Inventory held at the end of the year by Beta is sold at the beginning of the next year. The fair value of Beta's net assets at December 2020 is $237,500 and $235,000 at December 2021. Suppose that this acquisition gives Alpha significant influence over Beta. 1. What is the balance of Alpha's Investment in Beta at December 2020? (show your calculations). a. 111,500 b. 119,000 c. 117,890 d. 115,640 2. What is the equity income in Beta to be reported by Alpha in 2020? (show your calculations). a. 7,980 b. 7,140 c. 9,390 d. 10,500 3. What is the balance of Alpha's Investment in Beta at December 2021? (show your calculations). a. 123,170 b. 125,230 c. 125,420 d. 128,030 4. What is the equity income in Beta to be reported by Alpha in 2021? (show your calculations). a. 12,780 b. 10,530 c. 13,395 d. 15,390