Exercise 4
Sandpiper Inc. acquired a 30% interest in Shore Corporation for $27,000 cash on January 1, 2005, when Shores stockholders equity consisted of $30,000 of capital stock and $20,000 of retained earnings. Shore Corporation reported net income of $18,000 for 2005. The allocation of the $12,000 excess of cost over book value acquired on January 1 is shown below, along with information relating to the useful lives of the items:
	Overvalued receivables (collected in 2005)	$	(	600	)
	Undervalued inventories (sold in 2005)			2,400
	Undervalued building (6 years useful life remaining at January 1, 2005)			3,600
	Undervalued land			900
	Unrecorded patent (8 years economic life remaining at January 1, 2005)			3,200
	Undervalued accounts payable (paid in 2005)		(	300	)
	Total of excess allocated to identifiable assets and liabilities			9,200
	Goodwill			2,800
	Excess cost over book value acquired	$		12,000

Required:

Determine Sandpipers investment income from Shore for 2005.