On January 1, 2023, Lamar Company acquired 90,000 of the outstanding shares of Mitchell Company for $15 per share. This acquisition gave Lamar a 30% ownership of Mitchell and allowed Lamar to significantly influence Mitchells decisions.

As of January 1, 2023, Mitchell had assets with a book value of $3,000,000 and liabilities of $1,000,000. At that time, Mitchell held equipment with a ten-year remaining life and no salvage value, that was overvalued by $400,000. Mitchell also held a patent with a seven-year remaining life on its books that was undervalued by $700,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method.

Lamar applies the equity method for its investment in Mitchell.

Mitchells policy is to declare and pay a $1 per share cash dividend every October 1. Mitchells income, earned evenly throughout each year was $800,000 in 2023, and $750,000 in 2024.

3. Compute Lamars Investment in Mitchell Companys balance as of December 31, 2023, and December 31, 2024. Show your work.