Question

Using the information from Exhibit 1.1 (p.8 Chapter 1) below answer questions 1 - 4 below:...

Using the information from Exhibit 1.1 (p.8 Chapter 1) below answer questions 1 - 4 below:

EXHIBIT 1.1 Comparison of Fair Value Method (ASC 320) and Equity Method (ASC 323)

FAIR VALUE EQUITY METHOD
Influence Not Significant Influence Significant
Little Company Big Company Big Company
Carrying Fair Equity in Carrying
Dividend Value Value Investee Value
Year Income Dividends Income Investment Adjustment Income Investment
2014 $200,000 $50,000 $10,000 $235,000 $35,000 $40,000 $230,000
2015 300,000 100,000 20,000 255,000 55,000 60,000 270,000
2016 400,000 200,000 40,000 320,000 120,000 80,000 310,000
Total income recognized $70,000 $180,000

. Prepare the journal entries Big Company would record in fiscal year 2015 if it was using the Fair Value Method to account for

     its investment in Little Company in the space provided below.

Prepare the journal entries Big Company would record in fiscal year 2015 if it was using the Equity Method to account for

      its investment in Little Company in the space provided below.
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