Peanut Company acquired all of stock of Strong Company on january 1, 2015 for $500,000 cash. There were no combination or stock issuance costs.

Strong Company's book value was $300,000 at the time of acquisition. Fair market value differed from book balue for two items:

item book value fair value

Land $150,000 $250,000

Equipment(10 yrs life) $300,000 $360,000

In 2015, Strong Company reported $135, 000 of income andpaid $75,000 of dividends.

Question A: Calculate the annual amortization of any difference between fair market value and Strong's book values.

Question B: Then indicate how much investment income Peanut Company would recognize in 2015 under each of the following methods: Initital Value method, Partial equity method, and Equity method