On January 1, 2023, Archer, Incorporated, paid $100,000 for a 30% interest in Harley Corporation. This investee had assets with a book value of $550,000 and liabilities of $300,000. A patent held by Harley having a book value of $10,000 was actually worth $40,000 with a six-year remaining life. Any goodwill associated with this acquisition is considered to have an indefinite life. During 2023, Harley reported net income of $50,000 and paid dividends of $20,000 while in 2024 it reported net income of $75,000 and dividends of $30,000. Assume Archer has the ability to significantly influence the operations of Harley.

The balance in the Investment in Harley account at December 31, 2024, is

Multiple Choice

$125,500.

$119,500.

$116,500.

$100,000.

$118,000.