Problem #2 Calculation of annual amortization and investment balances (Based on P5-17) On January 1, 2017, Cisco company acquired 80% of the outstanding voting common stock of Skeeton company for $980,000. At the acquisition date, Skeeton had common stock of $700,000, retained earnings of $250,000, and a non- controlling interest fair value of $245,000. Cisco attributed the excess of FV over BV to various covenants with a 20-year remaining useful life. Cisco uses the equity method to account for its investment in Skeeton. During the next two years, Skeeton reported the following: Year 2017 2018 Net Income $150,000 $130,000 Dividends Declared $35,000 $45,000 Inventory Purchases from Cisco $100,000 $120,000 Cisco sells the inventory to Skeeton at a 60% mark-up on cost. At the end of 2017 and 2018, 40% of the current year purchases remained in inventory (Note: the 2017 E.I. was sold in 2018). Required: a) Compute the balance in Cisco's investment in Skeeton as of December 31, 2017 b) Compute the balance in Cisco's investment in Skeeton as of December 31, 2018