Lexington Corporation paid $2,240,000 for a 60% interest in Valley Corporation's outstanding voting common stock on January 1, 2018. The book values and fair values of Valleys assets and liabilities on January 1, along with amortization data are as follows:

	Book Value	Fair Value
Cash	400,000	400,000
Accounts Receivable, net	700,000	700,000
Inventories (Sold in 2018)	860,000	940,000
Other current assets	200,000	170,000
Land	900,000	1,050,000
Buildings, net (20 Yr Remaining Life)	1,236,000	1,419,000
Equipment, net (8 Yr Remaining Life)	875,000	988,000
Accounts Payable	800,000	800,000
Other Current Liabilities	200,000	200,000
Bonds Payable	1,000,000	1,000,000
Capital Stock	2,000,000
Retained Earnings	1,120,000

Valley Corporation reported net income of $860,000 for 2018 and paid dividends of $205,000.

REQUIRED: 1. Calculate Lexingtons investment income from Valley for 2018 (Equity Basis) 2. Determine the balance of Lexingtons investment in Valley at 12/31/18 assuming equity basis.