Darlene Inc. purchased $20,000$ common shares $(20\%)$ of Carlyle Ltd$.$ on January $1,$ Year $4,$ for $$260,000.$ It did not have

significant influence over Carlyle. It elected to classify the investment as fair value through OCI. On September $30,$ Year

$5,$ Darlene obtained significant influence when there was a restructuring of the Board of Directors. Accordingly, Darlene

adopted the equity method on a prospective basis.

Additional information on Carlyle for the two years ending December $31,$ Year $5,$ is as follows:

Period Net Income Dividends Paid

Market Value per Share

end of period

Year $4$ $$150,000$ $$90,000$ $$14\mathrm{.}00$

Jan.$$Sept$.$ Year $5110,00070,00014\mathrm{.}60$

Oct.$$Dec$.$ Year $550,00020,00015\mathrm{.}00$

On January $1,$ Year $6,$ Darlene sold its investment in Carlyle for $$300,000.$

Required

$($a$)$ Calculate the balance in the investment account at the end of each period.

$($b$)$ Calculate the profit and OCI to be reported each period.

$($c$)$ Prepare the journal entries for the sale of the shares and the transfer of OCI to retained earnings on January $1,$ Year $6$