John Corporation acquired a 70 percent interest in Jojo Corporation on April 1, 2011, when it purchased 14,000 of Jojo's 20,000 outstanding shares in the open market at $13 per share. Additional costs of acquiring the shares consisted of $10,000 legal and consulting fees. Jojo Corporation's balance sheets on January 1 and April 1, 2011, are summarized as follows (in thousands):

ADDITIONAL INFORMATION1. The overvalued inventory items were sold in September 2011.2. The undervalued items of equipment had a remaining useful life of four years on April 1, 2011.3. Jojo's net income for 2011 was $80,000 ($60,000 from April to December 31, 2011).4. On December 1, 2011, Jojo declared dividends of $2 per share, payable on January 10, 2012.5. Any unidentified assets of Jojo are not amortized.REQUIRED1. Prepare a schedule showing how the difference between John's investment cost and book value acquired should be allocated to identifiable and/or unidentifiable assets.2. Calculate John's investment income from Jojo for 2011.3. Determine the correct balance of John's Investment in Jojo account at December 31,2011.

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January 1 (per books) $ 40 April 1 (per books) $ 45 April 1 (fair values) $ 45 Cash Inventories Other current assets 35 25 60 20 50 20 Land 30 100 30 95 50 135 Equipment-net $230 $250 $300 Total assets $ 45 $ 40 $ 40 Accounts payable Other liabilities Capital stock, $5 par Retained earnings January 1 Current earnings Total liabilities and equity 15 20 20 100 70 100 70 20 $250 $230