LUMICA VILICI CILI Essex Company issued common shares with a par value of $50,000 and a market value of $165,000 in exchange for 30 percent ownership of Tolliver Corporation on January 1, 20x2. Tolliver reported the following balances on that date: TOLLIVER CORPORATION Balance Sheet January 1, 20X2 Book Value Fair Value Assets Cash $ 40,000 $ 40,000 Accounts Receivable 80,000 80,000 Inventory (FIFO basis) 120,000 150,000 Land 50,000 65,000 Buildings and Equipment 500,000 320,000 Less: Accumulated Depreciation (240.000) Patent 25,000 Total Assets $550,000 $680,000 Liabilities and Equities Accounts Payable $ 30,000 $30,000 Bonds Payable 100.000 100.000 Common Stock 150,000 Additional Paid-In Capital 20.000 Retained Eamings 250,000 Total Liabilities and Equities $550,000 The estimated economic life of the patents held by Tolliver is 10 years. The buildings and equipment are expected to last 12 more years on average. Tolliver paid dividends of $9,000 during 20x2 and reported net income of $80,000 for the year. Required Compute the amount of investment income (loss) reported by Essex from its investment in Tolliver for 20x2 and the balance in the investment account on December 31, 20X2, assuming the equity method is used in accounting for the investment