On January 1, 2017, Alison, Inc., paid $90,400 for a 40 percent interest in Holister Corporations common stock. This investee had assets with a book value of $248,500 and liabilities of $93,500. A patent held by Holister having a $12,300 book value was actually worth $55,800. 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 $52,500 and declared and paid dividends of $18,000. In 2018, it had income of $56,000 and dividends of $23,000. During 2018, the fair value of Allisons investment in Holister had risen from $102,300 to $107,100.

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?