Digiservices acquires all of the stock of Cablewonder on January 1, 2017, for $40,000,000 in cash. Cablewonders book value at the date of acquisition was:

Common stock, $1.50 par	$ 1,000,000
Additional paid-in capital	3,500,000
Retained earnings	11,000,000
Accumulated other comprehensive loss	(300,000)
Treasury stock	(200,000)
Total	$15,000,000

All of Cablewonders recorded assets and liabilities are carried at fair value, but it has previously unrecorded customer-related intangible assets valued at $10,000,000 that are capitalizable under the requirements of ASC Topic 805. These intangibles have an estimated life of 5 years, straight-line. Goodwill is impaired by $600,000 in 2017, and is unimpaired in 2018 and 2019. Customer-related intangible assets are unimpaired during this period. Cablewonder reports net income, other comprehensive income and declared and paid dividends as follows for 2017, 2018, and 2019:

	2017	2018	2019
Net income	$7,950,000	$4,000,000	$5,000,000
Other comprehensive income (loss)	50,000	(80,000)	(100,000)
Dividends	1,500,000	1,500,000	1,500,000

Digiservices uses the complete equity method to account for its investment in Cablewonder on its own books.

Required:

Calculate the amount Digiservices reports for 2018 as equity in net income of Cablewonder on its own books.