QUESTION 1 30 Konica Company acquires 40% of the voting stock of Lexmark Corporation on January 1, 2018 for $ 60,000,000 and treats it as an equity method investment. The book value on that date was $ 100,000,000. Book values approximated fair values except for machinery & equipment that was undervalued by $ 10,000,000 (10 year life), building that was overvalued by $ 4,000,000 (4 year life). Konica also found previously unrecorded intangibles of $50,000,000 (indefinite life). Lexmark reports the following income and dividends: Date: year ended Income Dividends December 31, 2018 $ 9,000,000 0 December 31, 2019 $ 6,000,000 0 December 31, 2020 $5,000,000 0 December 31, 2021 $ 5,000,000 $ 1,000,000 Konica sells inventory to Lexmark at a markuptor 25% on cost and Lexmark sells to Konica at a markup of 309 on cost. The following inventory balances are available: Date Inventory held by Konica Inventory held by Lexmark December 31, 2020 $ 1,560,000 1,000,000 December 31, 2019 December 31, 2020 December 31, 2021 $ 6,000,000 $5,000,000 $5,000,000 ololo $1,000,000 Konica sells inventory to Lexmark at a markup of 254 on cost and Lexmark sells to Konica at a markup of 30% on cost. The following inventory balances are available: Date Inventory held by Konica Inventory held by Lexmark December 31, 2020 $ 1,560,000 1,000,000 December 31, 2021 $ 2,600,000 1,025,000 Required: a. What is equity income reported by Konica on December 31, 2021? b. What is the balance in the Investment in Lexmark account on December 31, 20212