a) Notes b)Equity income accrual—2015 ($181,500 × 30%)$54450Amortization—2015 (given)($9,500)Intra-entity profit recognized on 2014 transfer*$2412Intra-entity profit deferred on 2015 transfer**($4224)Equity income recognized by Matthew in 2015$43,138 Solution a) Notes b)Equity income accrual—2015 ($181,500 × 30%)$54450Amortization—2015 (given)($9,500)Intra-entity profit recognized on 2014 transfer*$2412Intra-entity profit deferred on 2015 transfer**($4224)Equity income recognized by Matthew in 2015$43,138.

1. a)
Notes
b)Equity income accrual—2015 ($181,500 × 30%)$54450Amortization—2015
(given)($9,500)Intra-entity profit recognized on 2014 transfer*$2412Intra-entity profit deferred
on 2015 transfer**($4224)Equity income recognized by Matthew in 2015$43,138
Solution
a)
Notes
b)Equity income accrual—2015 ($181,500 × 30%)$54450Amortization—2015
(given)($9,500)Intra-entity profit recognized on 2014 transfer*$2412Intra-entity profit deferred
on 2015 transfer**($4224)Equity income recognized by Matthew in 2015$43,138