Stock dividend, subsidiary stock sales, equity method. On January 1, 2015, Wells Corporation acquires 8,000 shares of Towne Company stock and 18,000 shares of Sara Company stock for $176,000 and...

Stock dividend, subsidiary stock sales, equity method. On January 1, 2015, Wells Corporation acquires 8,000 shares of Towne Company stock and 18,000 shares of Sara Company stock for $176,000 and $240,000, respectively. Each investment is acquired at a price equal to the subsidiary’s book value, resulting in no excesses. Towne Company and Sara Company have the following stockholders’ equities immediately prior to Wells’s purchases: