What would be Investment in Brinkman Corp account balance

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Question - Bassett Inc. acquired all of the outstanding common stock of Brinkman Corp. on January 1, 2019, for $422,000. Equipment with a ten-year life was undervalued on Brinkman's financial records by $48,000. Brinkman also owned an unrecorded customer list with an assessed fair value of $71,000 and an estimated remaining life of five years. Brinkman earned reported net income of $185,000 in 2019 and $226,000 in 2020. Dividends of $75,000 were paid in each of these two years. Selected account balances as of December 31, 2021, for the two companies follow.

 

Bassett

Brinkman

Revenues

$1,120,000

$860,000

Expenses

500,000

600,000

Investment income

Not given

0

Retained earnings, 1/1/21

850,000

650,000

Dividends paid

132,000

80,000

If the equity method had been applied, what would be the Investment in Brinkman Corp. account balance within the records of Bassett at the end of 2021?

Reference no: EM133087354

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