Pak purchased a 40 percent interest in Sco of Germany for $1,080,000 on January 1, 2016. The excess cost over book value is due to a patent with a 10-year amortization period. A summary of Sco's net assets at December 31, 2015, and at December 31, 2016, after translation into U.S. dollars, is as follows:

Exchange rates for euros were $1.14 on January 1, 2016; $1.16 average for 2016; $1.15 when dividends were declared; and $1.18 at December 31, 2016. Sco had net assets of €4,000,000 at January 1, 2016; net income of €500,000 for 2016; and dividends of €300,000. It ended the year with net assets of €4,200,000. Sco's functional currency is the euro.
REQUIRED
1. Calculate Pak's income from Sco for 2016.
2. Determine the balance of Pak's Investment in Sco account at December 31, 2016.
3. Develop a proof of your calculation of the Investment in Sco account balance at December 31, 2016.

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Retained Earnings $400,000 310,000 (192,000) Equity Adjustment Capital Stock $2,000,000 Net Assets December 31, 201:5 Net income Dividends Translation adjustment December 31, 201<6 $2,400,000 310,000 192,000) 212,000 $%2,730,000 $212,000 $212,000 $2,000,000 $518,000