1. On January 1, 2021, Adam Co. acquired 15,000 shares of Conor Company for $150,000 giving Adam a 10% ownership of Conor. Adam appropriately accounts for this investment using the fair value method. The market value of Adams investment at December 31, 2021 was $165,000.

On January 1, 2022, Adam purchased an additional 25,000 shares (25%) of Conor for $305,000. This last purchase gave Adam Co. the ability to exercise significant influence over Conor Corp.

The book value of Conor on January 1, 2022 was $985,000. Any excess of cost over book value is assigned to a database which has a remaining life of five years at January 1, 2022. Conor reports net income for 2022 of $175,000 and dividends were paid in 2022 of $25,000.

Required:

Calculate the balance in the Investment account at December 31, 2022.