Mehan Incorporated- what was the balance in the investment account at December 31, 2011(with explanation)
On January 1, 2010, Mehan, incorporated purchased 15,00 shares of Cook Company f or $ 150,000 giving Mehan a 15% ownership of Cook. On January 1, 2011 Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2010 was $1,000,000. The book value of Cook on January 1, 2011, was $ 1, 1150,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over five years. Cook reports net income and dividend as follows. These amounts are assumed to have occurred evenly throughout the years.
Net income Dividends
2010 $200,000 $50,000
2011 225,000 50,000
2012 250,000 60,000
On April 1, 2012, just after its first dividend receipt, Mehan sells 10,000 shares of its investment. What was the balance in the investment account at December 31, 2011?