Pepperdine Corporation acquired the voting stock of Stockton Company on January $1,2022$ for $$50,000$ in cash. Stockton$$s book value at the date of acquisition was $$10,000.$ Stockton$$s net assets were reported at amounts approximating fair value. However, it had previously unreported identifiable intangibles $(5-$year life, straight$-$line$),$ valued at $$15,000.$ During $2022,$ Stockton reported net income of $$3,500$ and declared and paid dividends of $$200.$ During $2023,$ Stockton reported net income of $$4,000$ and declared and paid dividends of $$200.$ Goodwill from this acquisition was not impaired in $2022$ but was impaired by $$300$ in $2023.$ Pepperdine uses the complete equity method to report its investment in Stockton on its own books.

Required

a$.$ Calculate equity in net income of Stockton, reported on Pepperdine$$s books, for $2022$ and $2023.(6$ points, $3$ for each year$)$

b$.$ Calculate the December $31,2022$ and December $31,2023$ balance for Investment in Stockton, reported on Pepperdine$$s books. $(6$ points, $3$ for each year$)$