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) schedule to show the amount of goodwill from Hay's investment in Joy.

b) schedule to show the balance in Hay's investment account at December 31, 2018.

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:

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?