Reference no: EM133153187

Question - On January 1, 2020, Squeak Inc. paid $900,000 to purchase 30% of Pip Inc.'s outstanding voting shares. On the date of acquisition, Pip's net assets were valued at $3,900,000. The full purchase price discrepancy was allocated to Plant & Equipment, which had a remaining useful life of 10 years. Pip's earned $150,000 in both 2020 and 2021. Pip paid dividends of $20,000 and $10,000 during 2020 and 2021, respectively. Pip declared dividends of $10,000 and $10,000 during 2020 and 2021, respectively. Squeak Inc. has significant influence over Pip Inc. and uses the equity method. Calculate the balance in Squeak's Investment in Pip account as at December 31, 2021.