On January $1,2023,$ Drago Incorporated acquired common stock of Balboa Manufacturing at book value. During the current year, Balboa earned $$1\mathrm{.}5$ million and declared and paid cash dividends of $$80,000.$

Indicate the amount shown for Investment in Balboa on Drago$$s balance sheet on December $31$ and the amount of total income Drago would report on the income statement for the year related to its investment under the assumption that Drago did the following:

A$.$ Paid $$2$ million for a $12-$percent interest in Balboa and classifies the investment as a passive investment. The fair value of the investment at December $31,2023$ was now $$2\mathrm{.}4$ million.

B$.$ Paid $$7$ million for a $40-$percent interest in Balboa and uses the equity method. The fair value of the investment at December $31,2023$ was now $$7\mathrm{.}3$ million.