1. On July 1, 2020, Mage Corporation bought 20% of the outstanding inventory shares of an investee for $4,000,000 when the fair value of net assets was $20,000,000. Mage Corporation has the ability to exercise significant influence over the operating and financial policies of the investee. The following information regarding the investee are available:

12 months ended 6 months ended December December 31, 2020 31, 2020 Net income 3,000,000 1,600,000 Dividend declared and 1,900,000 1,000,000 paid