Pencil Company purchased $40$ percent ownership of Stylus Corporation on January $1,20$X$1,$ for $$150,000.$ Stylus$$s balance sheet at the time of acquisition was as follows:

STYLUS CORPORATION

Balance Sheet

January $1,20$X$1$

Assets Liabilities and Equities

Cash $ $30,000$ Current Liabilities $ $40,000$

Accounts Receivable $120,000$ Bonds Payable $200,000$

Inventory $80,000$ Common Stock $200,000$

Land $150,000$ Additional Paid$-$In Capital $40,000$

Buildings & Equipment $ $300,000$

Less: Accumulated Depreciation $(120,000)180,000$ Retained Earnings $80,000$

Total Assets $ $560,000$ Total Liabilities & Equities $ $560,000$

During $20$X$1,$ Stylus Corporation reported net income of $$30,000$ and paid dividends of $$9,000.$ The fair values of Stylus$$s assets and liabilities were equal to their book values at the date of acquisition, with the exception of buildings and equipment, which had a fair value $$35,000$ above book value. All buildings and equipment had remaining lives of five years at the time of the business combination. The amount attributed to goodwill as a result of its purchase of Stylus shares is not impaired.

Required:

What amount of investment income will Pencil Company record during $20$X$1$ under equity$-$method accounting?

What amount of income will be reported under the cost method?

What will be the balance in the investment account on December $31,20$X$1?$