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On January 2, 2021, Miller Properties paid $27 million for 1 million shares of Marlon Company's 6 million outstanding common shares. Miller's CEO became a member of Marlon's board of directors during the first quarter of 2021. The carrying amount of Marlon's net assets was $112 million. Miller estimated the fair value of those net assets to be the same except for a patent valued at $30 million above cost. The remaining amortization period for the patent is 10 years. Marlon reported earnings of $51 million and paid dividends of $3 million during 2021. On December 31, 2021, Marlon's common stock was trading on the NYSE at $26.50 per share.

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Answer:

The statements are as shown in the solution.

Explanation:

As the question is not visible here, completely, the similar question is found online and is solved for these values. The method is as follows:

For Income Statement

Investment Revenue(Share of Income) is calculated as

[tex]IR=\frac{E_{reported}\times Shares}{Shares_{Outstanding}}[/tex]

Here

IR is the investment revenue which is to be calculated

E_reported are the reported earnings which is $51 million

Shares are given as 1 million.

Outstanding shares are given as 6 million

Solving for IR gives

[tex]IR=\frac{E_{reported}\times Shares}{Shares_{Outstanding}}\\IR=\frac{51 Million\times 1 million}{6 million}\\IR=\frac{51 Million\times 1 }{6 }\\IR=\$ 8.5 Million[/tex]

Patent Amortization is calculated  as

[tex]PA=\frac{P_{value}\times \frac{Shares}{Shares_{Outstanding}}}{Years}[/tex]

Here

PA is the patent amortization value which is to be calculated

P_value is the value of patent which is $30 million

Shares are given as 1 million.

Outstanding shares are given as 6 million

Years is the period of 10 years.

Solving for PA gives

[tex]PA=\frac{P_{value}\times \frac{Shares}{Shares_{Outstanding}}}{Years}\\PA=\frac{30 Million \times \frac{1 Million}{6 Million}}{10}\\PA=\$0.5 Million[/tex]

So the income statement is given as

                                   Income Statement

1-Investment Revenue (Share of Revenue)        |  $8.5 Million

2-Patent Amortization Adjustment                     |  ($0.5 Million)

-----------------------------------------------------------------------------------------

Net Income                                                          | $8.0 Million

For Investment Statement

Calculation of Dividend is given as

[tex]Div=\frac{D_{reported}\times Shares}{Shares_{Outstanding}}[/tex]

Here

Div is the investment entry for dividend which is to be calculated

E_reported are the reported earnings which is $3 million

Shares are given as 1 million.

Outstanding shares are given as 6 million

[tex]Div=\frac{D_{reported}\times Shares}{Shares_{Outstanding}}\\Div=\frac{\$3 Million\times 1 Million}{6 Million}\\Div=\$0.5 Million[/tex]

Now the statement of investment is given as

                                   Investment in Company M shares

Date | Details               | Debit ($ Million) | Date  | Details      | Credit($ Million)

2021 |                            |                              | 2021  |                    |

        | Cost                    |             27            |           | Dividend    |          0.5

        | Share (income)  |                8.5         |           | Patent        |          0.5

-----------------------------------------------------------------------------------------------------------------                                     a       |Total                  |               35.5         |          | Total        |          1.0

____________________________________________________________

Balance : $ 34.5 Million

For Statement of Cash Flows

                                               Statement of Cash Flows

                                        For Year Ending December 31, 2021

Cash Flow from Operating Activities

Dividends                                        | $   0.5  Million

Cash Flow from Investing Activities

Purchase of investment                 | ($ 27    Million)

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