What amount is the investment income for the current year

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During the start of the current year, Holland Co. bought 30,000 shares of an investee's 200,000 outstanding inventory shares for $6,000,000. On that date, the carrying amount of the acquired shares was $4,000,000. The entity attributed the excess of cost over carrying amount to patent with remaining useful life of 10 years. During the year, Disgust Company's officers gained a majority on the investee's board of directors. The investee reported earnings of $5,000,000 for the year and paid dividend of $3,000,000 at year-end.

Problem a. What amount is the investment income for the current year?

Problem b. What amount is the balance of "investment in associate" at the current year-end?

Reference no: EM132820045

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