Reference no: EM132858792

On January 1, 2018, Peanuts purchased 70% of the common stock of Spike for $320,000. At that date, the stockholders' equity of Spike comprised:

Spike Equity

Common stock 65,000
Additional paid in capital 195,000
Retained earnings 97,500

No identifiable assets or liabilities required revaluation on that date.

On December 31, 2021, Spike's stockholders' equity showed the following:

Spike Equity

Common stock 65,000
Additional paid in capital 195,000
Retained earnings 292,500
Income for 2021 was $32,500 and $16,250 dividends were paid in the year. Any goodwill is not impaired.

Question 1: What will be the balance in the Investment in Spike if Peanuts has applied full equity accounting since the acquisition date?