On January 1, Barn Corporation Acquired Common Stock of Yard

Essay

On January 1, Barn Corporation acquired common stock of Yard Corporation. At the time of acquisition, the book value and the fair market value of Yard Corporation's net assets were $675 million. During the year, Yard Corporation earned $160 million and declared dividends of $40 million. The market value of shares increased by 10 percent during the year.
How much income would Barn Corporation report on the income statement for the year related to its investment under the assumption that it:
a. Paid $75 million for 15 percent of the common stock and the securities are classified as available-for-sale securities.
b. Paid $150 million for 30 percent of the common stock and the securities are classified as influential securities.