Konica Company acquires 40% of the voting stock of Lexmark Corporation on January 1, 2017, for $60,000,000, and treats it as an equity method investment. There were no basis differences. Lexmark reports total net income of $20,000,000 for the period 2017 - 2020, and $5,000,000 for 2021. Lexmark paid no dividends during the period 2017 - 2020 but paid $1,000,000 in dividends in 2021. The accounting year for both companies ends December 31. Lexmark sells merchandise to Konica at a markup of 30% on cost. The inventory balances held by Konica, purchased from Lexmark, are as follows. [Hint: If you are not sure about "markup on cost", please google or read related articles to be familiar with it. It is a concept used a lot in practice. I am sure you have learned it in more than one prior business courses.]

Inventory Held by Konica; Purchased from Lexmark

December 31, 2020 $1,560,000

December 31, 2021 2,600,000

a. Calculate equity in net income of Lexmark, reported on Konica's 2021 income statement.

b. Calculate investment in Lexmark, reported on Konica's December 31, 2021 balance sheet.