Billy Inc. acquired 15% of Wendy Co. on January 1, 2021, for $60,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2022, Billy purchased an additional 25% of Wendy for $150,000 which resulted in significant influence over Wendy. On that date, the fair value of Wendy's common stock was $600,000 in total. Wendy's January 1 2022, book value equaled $370,000, although a land was undervalued by $ 45,000. Any additional excess cost over fair value was attributable to an undervalued patent with a 5-year remaining life. The prospective approach is used by Billy to account for the change to the equity method for its investment in Wendy. Requirements: a. Calculate the amount of annual excess amortization expense for 2022. In your answer, first indicate how much excess of cost over book value that Billy should allocate to the land and patent in boxes (1) and (2), respectively, on January 1, 2022, and then indicate the amount of annual excess amortization expense for 2022 in box (3). (6 points) Answer: (1): A (2): A (3):