Company A purchased a certain number of Company B's outstanding voting shares at $25 per share as a long-term investment. Company B had outstanding 36,000 shares of $14 par value stock.

	Fair Value Method				Equity Method
For b, e, f, and g, assume the following:
Number of shares acquired of Company B stock		4,500				10,800
Net income reported by Company B in first year	$	67,000			$	67,000
Dividends declared by Company B in first year	$	20,000			$	20,000
Market price at end of first year, Company B stock	$	22			$	22

Complete the following table relating to the measurement and reporting by Company A after acquisition of the shares of Company B stock.

a. What level of ownership by Company A of Company B is required to apply the method?

Please help with part e and f (Equity method) that I got incorrect. Thank you so much!

a. What level of ownership by Company A of Company B is required to apply the method? Answer is complete and correct. Fair value method Equity method Level of Equity Less than 20% At least 20% but not more than 50% b. At acquisition, the investment account on the books of Company A should be debited at what amount? Answer is complete and correct. Investment Amount $ 112,500 Fair value method Equity method $ 270,000 c. When should Company A recognize revenue earned on the stock of Company B? Answer is complete and correct. Investment Amount Fair value method When Co. declares a cash dividend Equity method When Co. B reports income or loss for the period d. After the acquisition date, how should Company A change the balance of the investment account with respect to the stock owned in Company B (other than for disposal of the investment)? Answer is complete and correct. Fair value method Equity method Adjust the Investment account for stock price changes Adjust the Investment account for net income and dividends from Company B e. What is the balance in the investment account on the balance sheet of Company A at the end of the first year? Answer is complete but not entirely correct. Investment Amount $ 99,000 Fair value method Equity method $ 286,450 X f. What amount of revenue from the investment in Company B should Company A report at the end of the first year? > Answer is complete but not entirely correct. Investment Revenue $ 2,500 Fair value method Equity method $ 23,450 X