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 Valley's assets and liabilities on January 1, along with amortization data are as follows: Book Value Fair Value Cash Accounts Receivable, net Inventories (Sold in 2018) Other current assets Land Buildings, net (20 Yr Remaining Life) Equipment, net (8 yr remaining life) 400,000 700,000 860,000 200,000 900,000 1,236,000 875,000 400,000 700,000 940,000 170,000 1,050,000 1,419,000 988,000 Accounts Payable Other Current Liabilities Bonds Payable Capital Stock Retained Earnings 800,000 200,000 1,000,000 2,000,000 1,120,000 800,000 200,000 1,000,000 Valley Corporation reported net income of $860,000 for 2018 and paid dividends of $205,000. REQUIRED: 1. Calculate Lexington's investment income from Valley for 2018 (Equity Basis) 2. Determine the balance of Lexington's investment in Valley at 12/31/18 assuming equity basis. 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 Valley's assets and liabilities on January 1, along with amortization data are as follows: Book Value Fair Value Cash Accounts Receivable, net Inventories (Sold in 2018) Other current assets Land Buildings, net (20 Yr Remaining Life) Equipment, net (8 yr remaining life) 400,000 700,000 860,000 200,000 900,000 1,236,000 875,000 400,000 700,000 940,000 170,000 1,050,000 1,419,000 988,000 Accounts Payable Other Current Liabilities Bonds Payable Capital Stock Retained Earnings 800,000 200,000 1,000,000 2,000,000 1,120,000 800,000 200,000 1,000,000 Valley Corporation reported net income of $860,000 for 2018 and paid dividends of $205,000. REQUIRED: 1. Calculate Lexington's investment income from Valley for 2018 (Equity Basis) 2. Determine the balance of Lexington's investment in Valley at 12/31/18 assuming equity basis