On January 1, 2016, Apple Corporation (Apple) and three other unrelated venturers formed a joint venture, Mango Ltd. (Mango). On January 1, 2016, Apple invested equipment with a carrying value of $480,000 and a fair value of $900,000 in exchange for a 70% interest in the joint venture and cash of $80,000. This transaction did not have commercial substance at the time of the investment.

Apple uses the equity method to report its investment in Mango.

In 2020, Apple sold land to Mango for a gain of $75,000. Mango still owns the land on December 31, 2020.

In 2020, Mango had a net income of $330,000 and declared dividends of $280,000.

The shareholders equity of Mango as of December 31, 2020 had a balance of $800,000.

Both companies pay income taxes at 30%.

Link to Excel spreadsheet: Joint Venture.xlsx

REQUIRED:

1. Prepare a presentation of how the Investment in Mango Ltd. would be reported on Apples balance sheet as of December 31, 2020. Show all calculations to support the balance sheet presentation. (11 marks)
2. Provide the amount of income that Apple will report from its investment in Mango on the 2020 income statement. Show all supporting calculations as needed. (4 marks)