On January 1, 2016, Aspen Company acquired 80 percent of Birch Company's voting stock for $452,000. Birch reported a $505,000

book value and the fair value of the noncontrolling interest was $113,000 on that date. Then, on January 1, 2017, Birch acquired 80

percent of Cedar Company for $112,000 when Cedar had a $104,000 book value and the 20 percent noncontrolling interest was valued

at $28,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-

year remaining life.

These companies report the following financial information. Investment income figures are not included.

2016 2017 2018

Sales:

Aspen Company $ 517,500 $ 715,000 $ 935,000

Birch Company 294,500 368,000 594,600

Cedar Company Not available 247,100 223,400

Expenses:

Aspen Company $ 477,500 $ 495,000 $ 557,500

Birch Company 241,000 305,000 510,000

Cedar Company Not available 236,000 181,000

Dividends declared:

Aspen Company $ 18,000 $ 45,000 $ 55,000

Birch Company 10,000 18,000 18,000

Cedar Company Not available 2,000 6,000

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, 2017, balance in Aspen's

Investment in Birch Company account?

b. What is the consolidated net income for this business combination for 2018?

c. What is the net income attributable to the noncontrolling interest in 2018?

d. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following intra-entity gross profits in

inventory at the end of each year:

Date Amount

12/31/16 $19,700

12/31/17 20,300

12/31/18 25,600

What is the accrual-based net income of Birch in 2017 and 2018, respectively?