On January 1, 2017, Alison, Inc., paid $83,600 for a 40 percent interest in Holister Corporation's common stock. This investee had assets with a book value of $279,500 and liabilities of $118,500. A patent held by Holister having a $6,800 book value was actually worth $42,800. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $33,500 and declared and paid dividends of $11,000. In 2018, it had income of $68,000 and dividends of $16,000. During 2018, the fair value of Allison's investment in Holister had risen from $92,900 to $103,200.

a.Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2018?

b.Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2018?