6. On January 1, Puckett Company paid $1.

6 million for 50,000 shares of Harrison’s voting

common stock, which represents a 40 percent investment. No allocation to goodwill
or other specific account was made. Significant influence over Harrison is
achieved by this acquisition and so Puckett applies the equity method.
Harrison distributed a dividend of $2 per share during the year and reported net income
of $560,000. What is the balance in the Investment in Harrison account found in Puckett’s
financial records as of December 31

Acquisition price $1,600,000

Equity income ($560,000 × 40%) 224,000

Dividends (50,000 shares × $2.00) (100,000)

Investment in Harrison Corporation as of December 31 $1,724,000