On July 1, 2013, Killearn Company acquired 84,000 of the outstanding shares of Shaun Company for $20 per share. This acquisition gave Killearn a 25 percent ownership of Shaun and allowed Killearn to significantly influence the investees decisions. As of July 1, 2013, the investee had assets with a book value of $5 million and liabilities of $266,400. At the time, Shaun held equipment appraised at $476,000 above book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $1,212,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shauns policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shauns income, earned evenly throughout each year, was $645,000 in 2013, $679,800 in 2014, and $723,000 in 2015. In addition, Killearn sold inventory costing $139,200 to Shaun for $232,000 during 2014. Shaun resold $101,500 of this inventory during 2014 and the remaining $130,500 during 2015. a. Determine the equity income to be recognized by Killearn during each of these years. Equity Income: 2013: 2014: 2015: b. Compute Killearns investment in Shaun Companys balance as of December 31, 2015