Brenda Inc. acquired 15% of Wendy Co, on January 1, 2022, for $90.000 and appropriately accounted for the investment using the fair-value method. On January 1, 2023, Brenda purchased an additional 25% of Wendy for $175,000 which resulted in significant influence over Wendy. On that date, the fair value of Wendy's common stock was $700,000 in total. Wendy's January 12023 , book value equaled $ 460,000 , although a land was undervalued by $55,000. Any additional excess of cost over book value was attributable to an undervalued patent with an 8 -year remaining life. The prospective approach is used by Brenda to account for the changeto the equity method for its investment in Wendy. Requirements: a. Calculate the amount of anilual excess amortization expense for 2023 that Brenda should consider. To consider your work, first indicate how much excess should be allocated to the land and patent by Brenda in boxes (1) and (2), respectively, on January 1, 2023, and then indicate the amount of annual excess amortization expense for 2023 in box (3). (6 points) Answer: (1) Excess to Land : A (2) Excess to Patent: A (3) Annual excess amortization expense: A 9. Ignore your answers in a. Now assume that the annual excess amortization xpense for 2023 calculated by Brenda was $8,500. Further assume that Wendy eported net income of $270,000 and paid dividends of $38,000 in 2023. Other formation remains unchanged. ased on these assumptions Calculate the amount of equity income that Brenda should report for 2023.13 .5 ints) (6 points) Answer: (1) Excess to Land : A (2) Excess to Patent: (3) Annual excess amortization expense: b. Ignore your answers in a. Now assume that the annual excess amortization expense for 2023 calculated by Brenda was $8,500. Further assume that Wendy reported net income of $270,000 and paid dividends of $38,000 in 2023. Other information remains unchanged. Based on these assumptions (1) Calculate the amount of eciuity income that Brenda should report for 2023. (3.5 points) Answer: (2) Calculate the balance of Investment in Wendy account at the end of 2023 that Brenda should report. (4.5 points)