On December $31,2022,$ Akron, Incorporated, purchased $5$ percent of Zip Company's common shares on the open market in exchange for $$15,650.$ On December $31,2023,$ Akron, Incorporated, acquires an additional $25$ percent of Zip Company's outstanding common stock for $$96,000.$

During the next two years, the following information is available for Zip Company:

Year Income Dividends Declared Common Stock Fair Value $(12/31)$

$2022$ $ $313,000$

$2023$ $ $76,000$ $ $6,100384,000$

$202497,00016,000477,000$

At December $31,2023,$ Zip reports a net book value of $$299,000.$ Akron attributed any excess of its $30$ percent share of Zip's fair over book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of $10$ years at December $31,2023.$

Required:

Assume Akron applies the equity method to its Investment in Zip account:

What amount of equity income should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?

Assume Akron uses fair$-$value accounting for its Investment in Zip account:

What amount of income from its investment in Zip should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?Problem $1-26($Algo$)($LO $1-2,1-4,1-5)$

On December $31,2022,$ Akron, Incorporated, purchased $5$ percent of Zip Company's common shares on the open market in exchange

for $$15,650.$ On December $31,2023,$ Akron, Incorporated, acquires an additional $25$ percent of Zip Company's outstanding common

stock for $$96,000.$

During the next two years, the following information is available for Zip Company:

At December $31,2023,$ Zip reports a net book value of $$299,000.$ Akron attributed any excess of its $30$ percent share of Zip's fair over

book value to its share of Zip's franchise agreements. The franchise agreements had a remaining life of $10$ years at December $31,$

Required:

a$.$ Assume Akron applies the equity method to its Investment in Zip account:

What amount of equity income should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?

b$.$ Assume Akron uses fair$-$value accounting for its Investment in Zip account:

What amount of income from its investment in Zip should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?

a$1.$ Equity income

a$2.$ Investment in Zip account

b$1.$ Reported income

b$2.$ Investment in Zip account