E2-5 Phillips Company bought 40 percent ownership in Jones Bag Company on January 1, 20X1, at underlying book value. In 20X1, 20X2, and 20X3, Jones Bag reported net income of $8,000, $12,000, and $20,000, and dividends of $15,000, $10,000, and $10,000, respectively. The balance in Phillips Companys investment account on December 31, 20X3, was $54,000. Required In each of the following independent cases, determine the amount that Phillips paid for its invest- ment in Jones Bag stock assuming that Phillips accounted for its investment using the (a) cost method and (b) equity method