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On January 1, Elmhurst Co. acquired a 30% interest in Lincoln, Inc. with the excess of purchase price over book value solely attributable to equipment

On January 1, Elmhurst Co. acquired a 30% interest in Lincoln, Inc. with the excess of purchase price over book value solely attributable to equipment with a ten-year life and undervaluation by $500,000. During the year of acquisition, Lincoln reported net income of $700,000. What amount of Equity Income should Elmhurst report on its income statement for the year of acquisition?

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