Chapter 2, Problem 2.19P

Investments Carried at Fair Value and Equity Method
Gant Company purchased 20 percent of the outstanding shares of Temp Company for $70,000 onJanuary 1, 20X6. The following results are reported for Temp Company:
  
Required
Determine the amounts reported by Gant s income from its investment in Temp for each year andthe balance in Gant’s investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:
a. Carries the investment at fair value.
b. Uses he equity method