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On January 1, 2013, Pierce, Inc., purchased 19,500 shares of Marion Company for $624,000, giving Pierce 10 percent ownership of Marion. On January 1, 2014, Pierce purchased an additional 39,000 shares (20 percent) for $1,423,500. This latest purchase gave Pierce the ability to apply significant influence over Marion. The original 10 percent investment was categorized as an available-for-sale security. Any excess of cost over book value acquired for either investment was attributed solely to goodwill. Marion reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period. Net Income Cash Dividends (paid quarterly) 2013 $421,000 $133,000 2014 623,000 147,500 2015 662,500 181,500 On July 1, 2015, Pierce sells 3,900 shares of this investment for $46 per share, thus reducing its interest from 30 to 28 percent. However, the company retains the ability to significantly influence Marion. Using the equity method, what amounts appear in Pierce’s 2015 income statement?

Financial Accounting, Accounting

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