1. Compute the Equity income in Sage reported by Parsley Inc. on its stand-alone income statement.

In 2010, Parsley Inc. acquired 25% of Sage Corporation. Both companies have a December 31 year-end and Parsley accounts for its investment in Sage using the equity method of accounting. On January 1, 2015, Parsley Inc. acquired the remaining 75% of Sage Corporation for $780,508,800 making Sage a wholly owned subsidiary. The carrying value of the 25% equity method investment on December 31, 2014 was $41,516,000*1. Sage Corporation reported stockholders' equity at December 31, 2014 of $43,773,600. Parsley recorded a gain on previously held equity method investment of $218,653,600 on January 1, 2015. The excess of fair value over the book value of net assets acquired was due to Property, plant and equipment with a fair value in excess of book value of $2,808,000 (an 12-year remaining economic life), an unrecorded customer list with a fair value of $15,940,000 (8-year economic life), an unrecorded patent with a fair value of $10,500,000 (5-year economic life), Inventory with a fair value in excess of book value of $860,000 (1-year economic life), with the balance attributable to goodwill (indefinite economic life). *1. The carrying value was comprised of 25% of stockholders' equity, $10,943,400 plus an unamortized balance for customer list of $2,580,000 (3-year remaining life) plus goodwill of $27,992,600. For 2020, the companies had the following income statement account balances assume there are no intra-entity transactions between Parsley and Sage, nor is goodwill impaired: Sales Cost of goods sold Depreciation expense Amortization expense Operating expenses Equity income in Sage Net income Parsley $1,232,188,000 619,872,000 51,932,000 24,468,000 242,802,000 Not given Not given Sage $414,280,000 208,380,000 28,240,000 15,708,000 88,465,000 $73,487,000