1. Imani, Inc., buys 40 percent of ACC Company on January 1, 2020, for $850,000. This acquisition gave Imani the ability to exercise significant influence over the investee. ACCs net assets on that date were $1,350,000. Any excess cost over the underlying book value was assigned to a copyright that was undervalued on its balance sheet. This copyright has a remaining useful life of 10 years. Imani immediately begins supplying inventory to ACC as follows:

Year	Cost to Imani	Transfer Price	Amount Held by ACC at year-end (at transfer price)
2020	$95,000	$125,000	$40,000
2021	120,000	160,000	42,000

ACC reports net income of $250,000 in 2020 and $330,000 in 2021, additionally ACC declares and pays $25,000 in dividends each year. 3. What is the equity income in ACC to be reported by Imani in 2021

2. 4. What amount should Imani report as its Investment in ACC on its December 31, 2021, balance sheet?