Franklin purchases 40 percent of Johnson Company on January 1 for $638,700. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnsons operating and financing policies. Johnson reports assets on that date of $1,494,000 with liabilities of $566,000. One building with a seven-year remaining life life is undervalued on Johnsons books by $306,250. Also, Johnsons book value for its trademark (10-year life) is undervalued by $362,500. During the year, Johnson reports net income of $91,000 while declaring dividends of $30,000. What is the Investment in Johnson Company balance (equity method) in Franklins financial records as of December 31?

Multiple Choice

• $631,100.

• $648,600.

• $667,500.

• $663,100.