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On December $31,2022,$ Akron, Incorporated, purchased $5$ percent of Zip Company's common shares on the open market in exchange

for $$16,250.$ On December $31,2023,$ Akron, Incorporated, 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 $31,2023,$ Zip reports a net book value of $$294,000.$ 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 $31,$

Required:

o$.$ Assume Akron applies the equity method to its Investment in Zip account:

What amount of equity income should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?

b$.$ Assume Akron uses fair$-$value accounting for its Investment in Zip account:

What amount of income from its investment in Zip should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?

On December $31,2022,$ Akron, Incorporated, purchased $5$ percent of Zip Company's common shares on the open market in exchange

for $$16,250.$ On December $31,2023,$ Akron, Incorporated, 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 $31,2023,$ Zip reports a net book value of $$294,000.$ 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 $31,$

Required:

a$.$ Assume Akron applies the equity method to its Investment in Zip account:

What amount of equity income should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?

b$.$ Assume Akron uses fair$-$value accounting for its Investment in Zip account:

What amount of income from its investment in Zip should Akron report for $2024?$

On Akron's December $31,2024,$ balance sheet, what amount is reported for the Investment in Zip account?

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