Problem- 2

On January 1, 2013, American Corporation purchased 25% of the outstanding ordinary shares of Short Supplies for $210,000 cash. On that date, Short's book value and fair value were both $840,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31, 2013, was $80,000. During 2013, Short also paid cash dividends in the amount of $24,000.

Required:

Compute the amount that would be reported for the investment on American Corporation's financial statements at December 31, 2013.