On January 1, Snowbird Acquired Common Stock of A-Basin Company

Essay

On January 1, Snowbird acquired common stock of A-Basin Company. At the time of acquisition, the book value and the fair value of A-Basin's net assets were $200 million. During the current year, A-Basin earned $80 million and declared dividends of $10 million.
Indicate the amount shown for Investment in A-Basin on Snowbird's balance sheet on December 31 and the amount of income Snowbird would report for the year related to its investment under the assumption that Snowbird did the following:
A. Paid $60 million for a 20-percent interest in A-Basin and classifies the investment as held-to-maturity. The fair value of A-Basin on December 31 was $240 million.
B. Paid $80 million for a 35-percent interest in A-Basin and uses the equity method.