On January 1, 2012, Aspen Company acquired 80 percent of Birch Companys outstanding voting stock for $500,000. Birch reported a $490,000 book value and the fair value of the noncontrolling interest was $125,000 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for $224,000 when Cedar had a $253,000 book value and the 20 percent noncontrolling interest was valued at $56,000. In each acquisition, the subsidiarys excess acquisition-date fair over book value was assigned to a trade name with a 30-year life. These companies report the following financial information. Investment income figures are not included.

	2012		2013		2014
Sales:
Aspen Company		$ 637,500	$	650,000	$	732,500
Birch Company		269,500		356,750		588,300
Cedar Company		Not available		193,300		295,200
Expenses:
Aspen Company		$ 402,500	$	645,000	$	577,500
Birch Company		215,000		286,000		510,000
Cedar Company		Not available		182,000		260,000
Dividends declared:
Aspen Company		$ 20,000	$	35,000	$	45,000
Birch Company		5,000		20,000		20,000
Cedar Company		Not available		3,000		8,000

Assume that each of the following questions is independent:

a.

If all companies use the equity method for internal reporting purposes, what is the December 31, 2013, balance in Aspen's Investment in Birch Company account?

Investment in birch:

b.

What is the consolidated net income for this business combination for 2014?

Consolidation net income:

c.

What is the net income attributable to the noncontrolling interest in 2014?

Noncontrolling interests' share of the consolidated net income:

d.

Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following unrealized gross profits at the end of each year:

Date	Amount
12/31/12	$13,000
12/31/13	23,300
12/31/14	30,200

What is the realized income of Birch in 2013 and 2014, respectively?

Realized income 2013:

Realized income 2014: