Mellon Corporation paid \(\$ 160,000\) for a 40 -percent investment in the common stock of Kahn, Inc. For the first year, Kahn reported net income of \(\$ 84,000\) and at year end declared and paid cash dividends of \(\$ 16,000\). On the balance sheet date, the market value of Mellon's investment in Kahn stock was \(\$ 134,000\).

\section*{Required}

1. On Mellon's books, journalize the purchase of the investment, recognition of Mellon's portion of Kahn's net income, and receipt of dividends from Kahn under the method appropriate for these circumstances.

2. Repeat Requirement 1 but follow the market value method for comparison purposes only.

3. Show the amount that Mellon would report for the investment on its year-end balance sheet under the two methods.