grossman corp. uses the equity method in accounting for its 10% stake in orton inc. the book value of grossmans investment in orton was $20,000 at the start of the year. at the end of the year, the fair value of orton (as a whole) was $600,000 while the fair value of ortons assets minus its liabilities was $100,000. no excess deprecation or amortization resulted from this investment. orton inc. earned $60,000 in net income and declared $12,000 in dividends for the year. had orton instead used the fair value method, what would be the impact on the income statement and investment account?

charles corp. bought all of the outstanding shares of leno inc. on 1/1/2020 for $600,000 in a combination of cash and stock. leno remains a separate entity after the acquisition. leno inc's balance sheet on that date is as follows: cash $ 200,000 current liabilities $ 100,000 accounts receivable 350,000 long term debt 200,000 inventory 50,000 common stock ($1 par) 20,000 land 100,000 additional paid in capital 400,000 equipment-net 80,000 retained earnings 60,000 total assets $780,000 total liabilities & equity $780,000 the fair values are the same as book values except for land and equipment that have fair values of $200,000 and $70,000, respectively. the equipment has a remaining life of 5 years. leno inc. also has an unrecorded patent valued at $20,000. further assume that charles corp. and leno inc. had net income of $40,000 and $60,000 over the past year. neither firm pays dividends. assume no pushdown accounting was used. prepare the consolidation entries for a 1/1/2020 consolidated balance sheet.

charlies corp. purchased shares equivalent to 40% of the outstanding shares of tillman inc. and has influence over tillman. the goodwill resulting from the investment: is capitalized as an asset in charlie's corps books and tested periodically for impairment. is capitalized as an asset in charlie's corps books and amortized over time. has no impact whatsoever on either companies financial statements. is treated as income for the current fiscal period.