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  3. on december 31,2019, akron, inc., purchased 5 perc

On December 31,2019, Akron, Inc., purchased 5 percent of ZipCompany's common shares on...

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Accounting

On December 31,2019, Akron, Inc., purchased 5 percent of
ZipCompany's common shares on the open market in exchange for
$17,100. On December 31,2020, Akron, Inc., acquires an additional
25 percent of Zip Company's outstanding common stock for
$95,000.During the next two years, the following information is
available for Zip Company:At December 31,2020, Zip reports a net book value of $280,000.
Akron attributed any excess of its 30 percent share of Zip's fair
over book value to its share of Zip's franchise agreements. The
franchise agreements had a remaining life of 10 years at December
31,2020.A. Assume Akron applies the equity method to its Investment in
Zip account:B. Assume Akron uses fair-value accounting for its Investment in
Zip account:
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