Problem 2. On January 2, 2017, Michigan Company acquired 25% of the common stocks of Detroit Company for $30 million paid in cash. Michigan Company accounts for its investment using the equity method. At the time of acquisition, Detroit Companys balance sheet was as follows (in millions):

Assets	Liabilities and Equity
Current Assets 22	Current Liabilities 42
Property and equipment, net 415	Long-term debt 518
Patents and trademarks 150	Capital Stock 12
	Retained Earnings 15
Total Assets 587	Total Liabilities and Equity 587

Valuation of Detroits assets and liabilities revealed that its reported patents and trademarks (20-year life) had a fair value of $160 million and it had unrecognized brand names (30-year life) worth $18 million. Detroits December 31, 2020, retained earnings balance is $20 million. For 2020, it reported net income of $2.5 million and paid $650,000 in dividends.

Required:

1. Prepare the 2020 entries to report the above information on Michigans books? Show

all your calculations (1 point)

2. Calculate the Investment in Detroit Company, reported on Michigans December 31, 2020

balance sheet. Show all your calculations (3 points)