Comet, Inc. acquires 15% of Flash Co. on January 1, 2017 for $147,000 when the book value of Flash was $800,000. During 2017, Flash reported net income of $320,000 and paid dividends of $50,000. On January 1, 2018, Comet purchased an additional 25% of Flash for $287,500, achieving the ability to exert significant influence over Flash. Any excess cost was attributable to an undervalued patent with a 5-year remaining life for the first purchase and a 4-year life for the second. During 2018, Flash reported net income of $280,000 and paid dividends of $50,000. Based on the above information: (a) To account for the change to equity method, prepare a journal entry for Comet in the beginning of 2018 to adjust the investment in Flash (Date is omitted). Account Title Debit (b) Compute the amount of equity income that Comet should report for 2018 Answer (c) Compute the balance of Investment in Flash account at the end of 2018