Part B (continuation of Part A)
In 2016, Badger Company reports $400,000 in income and $60,000 in other comprehensive income from fair value increases to its available-for-sale investment portfolio. The company declares and pays a $120,000 cash dividend. During this fiscal year, Eagle sells inventory costing $80,000 to Badger for $100,000. Badger continues to hold 30 percent of this merchandise at the end of 2016 Eagle maintains 40 percent ownership of Badger throughout the period.