Franklin purchases 40 percent of Johnson Company on January 1 for $566,100. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,490,000 with liabilities of $554,000. One building with a 7-year remaining life is undervalued on Johnson's books by $246,750. Also, Johnson's book value for its trademark (10-year remaining life) is undervalued by $232,500. During the year, Johnson reports net income of $94,000 while declaring dividends of $20,000. What is the Investment in Johnson Company balance (equity method) in Franklin's financial records as of December 31? Multiple Choice O $586,400 $609,900 $595,700

Franklin purchases 40 percent of Johnson Company on January 1 for $566,100. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,490,000 with liabilities of $554,000. One buliding with a 7-year remaining life is undervalued on Johnson's books by $246,750. Also, Johnson's book value for its trademark (10-year remaining life) is undervalued by $232,500. During the year, Johnson reports net income of $94,000 while declaring dividends of $20,000. What is the investment in Johnson Company balance (equity method) in Franklin's financial records as of December 31 ? Multiple Choice $586,400 $609,900 $595,700