1. Sadflatte Corporation's stockholder's equity at December 31, 2020 included the following: 8% Preferred stock, $10 par value Common stock, no par Additional paid-in capital Retained earnings $ 2,000,000 20,000,000 8,000,000 8,000,000 $38,000,000 Prologa Corporation purchased a 30% interest in Sadflatte's common stock from other shareholders on January 1, 2020 for $11,600,000. What was the book value of Prolega's investment in Sadflatte? 2. An investor uses the cost method of accounting for its investment in common stock. During the current year, the investor received $20,000 in dividends, an amount that exceeded the investor's share of the investee company's undistributed income since the investment was acquired. The investor should report dividend income of what amount? Why