Accounting for Equity Method Investments Easton Company acquires 40 percent of the outstanding voting shares of Harris Company on January 1, 2019. To obtain these shares, Easton pays $156,000 in cash. Harris's book value of stockholders' equity is $280,000. Easton believes that (1) Harris buildings are undervalued by $40,000, and (2) Harris has an unrecorded patent that Easton values at $30,000. Easton considers the remaining balance sheet items to be fairly valued (no book-to-fair value difference). The remaining $40,000 of the purchase price excess over book value is ascribed to corporate synergies and other general unidentifiable intangible assets (goodwill). Assume that the undervalued buildings have an estimated remaining useful life of 20 years and the unrecorded patent has a useful life of 5 years. During 2019, Harris reported net income of $80,000 and paid cash dividends to shareholders totaling $40,000. a. Using the financial statement effects template, record Easton Company's equity in the earnings of Harris Company, including any amortization of the excess of fair value over book value of assets acquired. Balance Sheet Income Statement Noncash Asset Contrib. Capital Transaction Cash Asset + Liabilities + + Earned Capital 156,000 x Revenues Expenses = Net Income To record equity in earnings 0 + 96,000 x = 0 + + 32,000 x 0 32,000 x b. What is the value of the investment in Harris Company reported on Easton Company's balance sheet as of December 31, 2019? $ 172,000 X