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On January 1, 2012, Easton Entertainment acquired common stock of Wild Inc. At the time of acquisition, the book value and the market value of Wild's...

 On January 1, 2012, Easton Entertainment acquired common stock of Wild Inc. At the time of acquisition, the book value and the market value of Wild's net assets were $420 million. During the current year, Wild earned $100 million and declared dividends of $20 million. The market value of Wild on December 31, 2012, was $480 million.


     For each scenario below, determine the amount that Easton would report on its balance sheet for its investment in Wild at December 31, 2012; and the amount of income Easton would report for 2012 related to its investment.


a.  Scenario 1: Easton Entertainment paid $48 million for a 10% interest in Wild and classifies the Wild stock as trading securities.

b.  Scenario 2: Easton Entertainment paid $130 million for a 30% interest in Wild and uses the equity method to account for the investment. 

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