Reference no: EM132894645

Question - On Jan. 1, 2020, ABC purchased 30% of the outstanding shares of an investee for $7,500,000. As of this date, the investee has an equipment recorded at $2,000,000 less than its fair value. The equipment was bought exactly two years ago and originally has a total useful life of 10 years. For the year, the investee reported net income of $3,000,000, actuarial gains of $500,000, unrealized holding loss of $300,000 through OCI, and dividends declared and paid during November of $2,000,000. For the whole year, the equity of the investee included $20,000,000 par value from ordinary shares and $10,000,000 par value from the 8%, noncumulative, nonparticipating preference shares. What should be reported as the investment in associate as of the end of the year? You may use parenthetical solutions.