Bubble, Inc. acquires 15% of Riley Corporation on January 1, 2018, for $130,000 when the book value of Riley’s net assets was $760,000.  During 2018 Riley reported a net income of $150,000 and paid dividends of $32,000. Riley has land that is undervalued by $30,000 on January 1, 2018.  On January 1, 2019, Bubble purchased an additional 30% of Riley for $280,000, giving Bubble the ability to significantly influence the operating policies of Riley.  During 2019, Riley reported a net income of $180,000 and paid dividends of $32,000. Riley’s land (Riley has only one piece of land) was undervalued by $32,000 on January 1, 2019.  Any excess of cost over book value is attributable to Trademark which has a useful life of 8 years on January 1, 2018. During 2018 and 2019, there was no fair value adjustment for Riley (there were no changes in fair value).  And during 2018 and 2019, there were no changes in net assets.

1). What is the balance of the investment account in Riley on December 31, 2018?

2). What journal entry does Bubble need to make December 31, 2018, regarding Riley’s dividends?

3). In 2019, when Bubble acquired an additional 30% of Riley, Bubble needs to use the equity method retrospectively to record for investment in Riley.  Calculate Trademark in 2018 that will be recorded in 2019 if any.

4). In 2019, calculate the annual amortization of Trademark in 2018.

5). In 2019, using the equity method, what is the balance of the investment account in Riley on December 31, 2018? Show your calculation (can show journal entries).

6). Calculate Trademark in 2019 acquisition that will be recorded in 2019 if any.

7). In 2019, calculate the annual amortization of Trademark in 2019.

8). What is the balance of the investment account in Riley on December 31, 2019?  Show your calculation (can make journal entries).

Accounts	Dr.	Cr.