Burry Corp acquires 80amp; of bowman co. for $40 million in jan 1st, year 6. At the time of acquisition, bowman has a total net assets with fair…

Burry Corp acquires 80& of bowman co. for $40 million in jan 1st, year 6. At the time of acquisition, bowman has a total net assets with fair value of $25 million. For the years ended dec 31, year 6 and dec 31, year 7, bowman reports net income (loss) and pays dividend as shown:Year 6:Net income(loss): $2,000,000Dividends paid: $1,000,000Year 7:Net income(loss): ($600,000)Dividends paid: $800,000The excess of the acquisition price over the fair value of net assets acqired is assigned to goodwill. Since goodwill has an indefinite life, it is not amoritized.a)Compute the value of Burrys investment in bowman co as of dec 31, year 7, under the equity method.b) discuss the strengths and weaknesses of the income statments and balance sheet in reflecting the economic substance of this transaction and subsequent activities using the equity method
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