Huge Corporation acquires 5% of the outstanding voting shares of Tiny Corporation on January 1, 2016, for $100,000 when Tiny Corporation has a book value of $1,500,000. Despite the low percentage of ownership, Huge Corporation is able to exercise significant influence over Tiny, and therefore uses the equity method to account for the investment. An additional 30% of the stock is purchased on January 1, 2017, for $651,000. The following information is available for Tiny Corporation: 2016 2017 2018 Net Income 700,000 750,000 900,000 Dividends 150,000 100,000 100,000 The Fair Value of Tiny Corporations stock at December 31, 2016 was $2,170,000. The book values of Tiny Corporations asset and liability accounts are considered as equal to fair values except for a Customer List whose value accounted for Huge Corporations excess cost in each purchase. The Customer List had a remaining life of 10 years at January 1, 2016. Required: 1. If Huge Corporation sells its entire investment in Tiny Corporation on January 1, 2019, for $1,300,000 cash, what is the impact on Huge Corporations income? Show all your calculations (4 points) 2. Assume that Huge Corporation sells inventory to Tiny Corporation during 2017 and 2018 as follows: Cost to Huge Corporation Price to Tiny Corporation Year-End Balance (at transfer price) 2017 35,000 50,000 20,000 (sold in following year) 2018 33,000 60,000 40,000 (sold in following year) What amount of equity income should Huge recognize for the year 2018? Show all your calculations