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On January 1,2023, Bertrand, Incorporated, paid $83,600 for a 40 percent interest in Chestnut Corporation's...

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Accounting

On January 1,2023, Bertrand, Incorporated, paid $83,600 for a 40 percent interest in Chestnut Corporation's common stock. This investee had assets with a book value of $279,500 and liabilities of $118,500. A patent held by Chestnut having a $6,800 book value was actually worth $42,800. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to an indefinite-lived asset. During 2023, Chestnut earned income of $33,500 and declared and paid dividends of $11,000. In 2024, it had income of $68,000 and dividends of $16,000. During 2024, the fair value of Bertrand's investment in Chestnut had risen from $92,900 to $103,200.
Required:
a. Assuming Bertrand uses the equity method, what balance should appear in the Investment in Chestnut account as of December 31,2024?
b. Assuming Bertrand uses fair-value accounting, what income from the investment in Chestnut should be reported for 2024?
Answer is not complete.
a. Investment in Chestnut account as per the equity method
$
108,600
b. Income from the investment in Chestnut as per fair-value accounting
image

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