On January 1, 2017, Alison, Inc., paid $85,700 for a 40 percent interest in Holister Corporations common stock. This investee had assets with a book value of $256,000 and liabilities of $83,500. A patent held by Holister having a $9,800 book value was actually worth $20,300. 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 $48,000 and declared and paid dividends of $16,000. In 2018, it had income of $52,000 and dividends of $21,000. During 2018, the fair value of Allisons investment in Holister had risen from $99,100 to $105,100.

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?