Wooden’s Concrete acquired 20% of the outstanding common stock of Hoag, Inc. on January 1, 2014, by paying $1,100,000 for 40,000 shares. Hoag declared and paid a $0.50 per share cash dividend on June 30 and again on December 31, 2014. Hoag reported net income of $600,000 for the year. At December 31, 2014, the market price of Hoag’s common stock was $30 per share.

Instructions
(a) Prepare the journal entries for Wooden’s Concrete for 2014, assuming Wooden’s can-not exercise significant influence over Hoag. Use the cost method and assume Hoag common stock should be classified as available-for-sale.
(b) Prepare the journal entries for Wooden’s Concrete for 2014, assuming Wooden’s can exercise significant influence over Hoag. Use the equity method.
(c) Indicate the balance sheet and income statement account balances at December 31, 2014, under each method of accounting.