An investor company purchases a $20\%$ interest in an investee company, and the investor concludes that it can exert significant influence over the investee. The book value of the investee$$s Stockholders$$ Equity on the acquisition date is $$2,750,000$ and the investor purchases its $20\%$ interest for $$715,000.$ The investor is willing to pay the purchase price because the investee owns a building with a fair value of $$3,300,000$ and a book value of $$2,475,000.$ The building has a remaining useful life of $10$ years. Subsequent to the acquisition, the investee reports net income of $$660,000$ and pays a cash dividend to the investor of $$55,000.$ At the end of the first year, the investor sells the Equity Investment for $$880,000.$

Required

a$.$ What is equity income for the year?

Question $28$ Not changed since last attempt Marked out of $8\mathrm{.}00,$ P Flag question

acquisition, the investee reports net income of $$660,000$ and pays a cash dividend to the investor of $$55,000.$ At the end of the first year, the investor sells the Equity Investment for $$880,000.$

Required

a$.$ What is equity income for the year?

q

b$.$ What is the gain or loss on sale of the equity investment? Indicate a loss with a negative sign.

b$.$ What is the gain or loss on sale of the equity investment? Indicate a loss with a negative sign.