Englewood Inc. acquired some shares of common stock of Weston Corp. on January 1, 2014. At the time of acquisition, the book value and the market value of Westons net assets were $380 million. During the current year, Weston earned $95 million and declared dividends of $16 million. The market value of Weston on December 31, 2014 was $412 million. For each scenario below, determine the amount that Englewood would report on its balance sheet for its investment in Weston on December 31, 2014; and the amount of income Englewood would report for 2014 related to its investment.

Required:

1. Scenario 1: Englewood, Inc. paid $57 million for a 15% interest in Weston and classifies the Weston stock as trading securities.

2. Scenario 2: Englewood, Inc. paid $133 million for a 35% interest in Weston and uses the equity method to account for the investment.