Dole owns 20 percent of the outstanding stock of Ferfoglia and has significant influence. On 1/1/20, the balance in the investment in Ferfoglia is $300,000. Amortization associated with this acquisition is

$12,000 per year. In 2020, Ferfoglia earns an income of $200,000 and pays cash dividends of $50,000. Previously in 2019, Ferfoglia had sold inventory costing $60,000 Dole for $100,000. Dole consumed all but 40 percent of this merchandise during 2018 and used the rest during 2020. Ferfoglia sold additional inventory costing $30,000 to Dole for $50,000. Dole did not consume 30 percent of these 2020 purchases from Ferfogila until 2020. The fair value of the investment in Ferfoglia at 12/31/20 increased to $350,000. The fair value at 12/31/21 was $400,000.

Required:Computetheamountsrequested1.Theamount of unrealized profit deferred on intra-entity sale of inventory at12/31/20.

1. Theamountofinvestmentaccountbalanceat12/31/20.
2. Theamountofequityincomefortheyearended12/31/20.

4.Assume Dole elects the fair value optionfor its investment in Ferfoglia. What amount is reported for the investment in Ferfoglia at 12/31/20?

5.Assume Dole elects thefair value optionfor its investment in Ferfoglia. What amount of income from investment should Dole report for 2020?

For questions 6 & 7 disregard the fair value option

6. Assume Ferfoglia had other comprehensive income of $20,000 in 2020. What amount is reportedfor the investment in Ferfoglia.

7. Assume Ferfoglia had other comprehensive income of $20,000 in 2020. What amount of equityincome is reported for the year ended 12/31/20?