Fill in the dollar changes caused in the Investment account and Dividend Income or Investment Revenue account by each of the following transactions, assuming Crane Company uses (a) the fair value method or (b) the equity method for accounting for its investments in Hudson Company. (Must Show All Work and Formulas)

You should have amounts for BOTH methods for each of the 4 activities.

At the end of Year 3, compute the ending balance in the Investment account under the Fair Value and Equity methods. (MUST SHOW ALL WORK and Formulas)

1. At the beginning of Year 1, Crane bought 300,000 shares (30%) at $30 per share of Hudson's outstanding common stock.

2. During Year 1, Hudson reported $600,000 of net income and paid $300,000 of dividends. The common stock was trading at $31 per share at year-end.

3. During Year 2, Hudson reported $500,000 of net income and paid $250,000 of dividends. The common stock was trading at $32 per share at year-end.

4. During Year 3, Hudson reported a net loss of $30,000 and paid $100,000 of dividends. The common stock was trading at $ 25 per share at year-end.

Fair Value Method Equity Method

Investment Dividend Investment Investment

Account Income Account Revenue

Year 1

Year 2

Year 3