The North Company has supplied you with information regarding two investments that were made during 20X5, as follows:

On January 1, 20X5, North purchased for cash 40 percent of the 500,000 shares of voting common stock of the York Company for \(\$ 2,400,000\), representing 40 percent of the net worth of York. York's net income for the year ended December \(31,20 \mathrm{X} 5\), was \(\$ 750,000\). York paid dividends of \(\$ .50\) per share in 20X5. The market value of York's common stock was \(\$ 14\) per share on December 31, 20X5. North exercised significant influence over the operating and financial policies of York.

On July 1, 20X5, North purchased for cash 15,000 shares, representing 5 percent of the voting common stock of the Minor Company for \(\$ 450,000\). Minor's net income for the six months ended December 31, 20X5, was \(\$ 350,000\) and for the year ended December 31, 20X5, was \(\$ 600,000\). Minor paid dividends of \(\$ .30\) per share each quarter during 20X5 to stockholders of record on the last day of each quarter. The market value of Minor's common stock was \(\$ 32\) per share on January \(1,20 \times 5\), and \(\$ 34\) per share on December 31, 20X5.

\section*{Required}

a. As a result of these two investments, what should be the balance in the Investments account for North on December 31, 20X5? Show supporting computations in good form.

b. As a result of these two investments, what should be the income reported by North for the year ended December 31, 20X5 ? Show supporting computations in good form.