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Noncontrolling investment accounting (price different from book value) On January 1,2022, an...

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Accounting

Noncontrolling investment accounting (price different from book value)
On January 1,2022, an investor purchases for $480,000 a 15% ownership in an investee. The investees common stock has a readily determinable fair value. On January 1,2022, the book value of the investees assets and liabilities equals $1,080,000 and $300,000 respectively. On that date, the appraised fair values of the investees identifiable net assets approximated the recorded book values, except for a patent. On January 1,2022, the patent had a recorded book value of $0 an estimated fair value equal to $96,000 and a 10 year remaining useful life. During the year ended December 31,2022, the investee company reported net income equal to $72,000 and dividends equal to $48,000. On December 31,2022, the fair value of the investors share of the investee is $540,000.
Assume the investor cannot exert significant influence over the investee. Determine the balance in the Investment in Investee account at December 31,2022.
Select one:
a.
$482,160
b.
$480,000
c.
$540,000
d.
$564,000

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