1. On January 1, 2018, Hay Co. paid $610,000 for 30% of the voting common stock of Joy Corp giving it the ability to exercise significant influence over the company. At the time of the investment, Joy had net assets with a book value and fair value of $2,000,000. During 2018, Joy incurred a net loss of $75,000 and paid dividends of $110,000. Any excess cost over book value is attributable to goodwill with an indefinite life. Required: a) Prepare a schedule to show the amount of goodwill from Hay's investment in Joy. b) Prepare a schedule to show the balance in Hay's investment account at December 31, 2018.

2. On January 1, 2018, Jay Corp. acquired 40% of the outstanding common stock of Bob Corporation for $1,300,000. This acquisition gave Jay the ability to exercise significant influence over the investee. The book value of Bob Corporation was $2,430,000. Any excess cost over the underlying book value was assigned to a patent that was undervalued on Bob's balance sheet. This patent has a remaining useful life of ten years. For the year ended December 31, 2018, Bob reported net income of $342,000 and paid cash dividends of $98,000. Required: Prepare a schedule to show the balance Jay should report as its Investment in Bob Corporation at December 31, 2018.

3. Goy Company owns 15% of the common stock of Troy Corporation and used the fair-value method to account for this investment. Troy reported net income of $110,000 for 2018 and paid dividends of $60,000 on October 1, 2018. How much income should Goy recognize on this investment in 2018?