Equity Method Accounting, Subsequent Years

PL Communications acquired all of the stock of SJ Telecom on January $1,2022.$ It is now December $31,2024,$ three years later. PL Communications uses the complete equity method to report its investment in SJ Telecom on its own books. Both companies have December $31$ year$-$ends. The following information is available:

$$ PL Communications paid $$400$ million to acquire SJ Telecom.

$$ At the date of acquisition, the book values of all of SJ Telecom$$s reported assets and liabilities approximated fair value. Previously unreported limited$-$lived identifiable intangibles with a fair value of $$20$ million were recognized. These intangibles had an estimated life of $5$ years, straight$-$line. There have been no impairment losses.

$$ Total goodwill impairment losses for $2022$ and $2023$ were $$1$ million. There is no goodwill impairment for $2024.$

$$ The change in SJ Telecom$$s retained earnings from January $1,2022,$ to December $31,2023,$ was $$12$ million.

$$ In $2024,$ SJ Telecom reported net income of $$6,500,000$ and declared and paid dividends of $$1,500,000.$

$$ SJ Telecom does not report any other comprehensive income.

Required

Enter both answers in millions $($using decimal places, if applicable$).$

a$.$ Calculate equity in net income for $2024,$ reported on the books of PL Communications.

$Answer

$0$

million

b$.$ Calculate the December $31,2024$ balance in Investment in SJ Telecom, reported on the books of PL Communications.

$Answer

$0$

million