Prime Company holds 60 percent of Suspect Company’s stock,acquired on January 1, 20X2, for $150,000. On the date ofacquisition, Suspect reported retained earnings of $58,000 and$130,000 of common stock outstanding, and the fair value of thenoncontrolling interest was $100,000. Prime uses the fully adjustedequity method in accounting for its investment in Suspect.

Trial balance data for the two companies on December 31, 20X7, areas follows:

	Prime Company									Suspect Company
Item	Debit				Credit					Debit				Credit
Cash and Accounts Receivable		$	153,000								$	56,000
Inventory			244,000									104,000
Land			104,000									75,000
Buildings and Equipment			450,000									162,000
Investment in Suspect Co.			182,700
Cost of Goods Sold			158,000									90,000
Depreciation and Amortization Expense			28,000									20,000
Other Expenses			22,000									11,000
Dividends Declared			56,000									39,000
Accumulated Depreciation						$	178,500								$	47,000
Accounts Payable							50,000									23,000
Bonds Payable							190,000									44,000
Common Stock							280,000									130,000
Retained Earnings							401,000									148,000
Sales							270,000									165,000
Income from Suspect Co.							28,200
Total		$	1,397,700			$	1,397,700				$	557,000			$	557,000

Additional Information

1. At the date of combination, the book values and fair values ofSuspect’s separately identifiable assets and liabilities wereequal. The full amount of the increased value of the entity wasattributed to goodwill. At December 31, 20X6, the management ofPrime reviewed the amount attributed to goodwill as a result of itspurchase of Suspect stock and recognized an impairment loss of$15,000. No further impairment occurred in 20X7.
2. On January 1, 20X5, Suspect sold land for $17,000 that had cost$6,500 to Prime.
3. On January 1, 20X6, Prime sold to Suspect equipment that it hadpurchased for $67,200 on January 1, 20X1. The equipment has a total12-year economic life and was sold to Suspect for $51,800. Bothcompanies use straight-line depreciation.
4. Intercompany receivables and payables total $6,000 on December31, 20X7.

Required:
a. Prepare a reconciliation between the balance in Prime’sInvestment in Suspect Co. account reported on December 31, 20X7,and Suspect’s book value. (Enter the proportion of stockheld as a fraction (i.e., 0.75), not in percent.)