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On January 1 , Deacon Co . acquired a 4 0 % interest in Pirate, Inc. for $ 1 , 0 0 0 , 0


  • On January 1, Deacon Co. acquired a 40% interest in Pirate, Inc. for $1,000,000.  At the time of purchase, the book value of the net assets of Pirate equaled $1,875,000.  The purchase price included an excess of $250,000 over book value solely attributable to equipment with a ten-year life. During the year of acquisition, Pirate reported net income of $600,000 and paid dividends of $150,000.What amount of Equity Income should Deacon report on its income statement for the year of acquisition?Deacons Equity Investment balance in Pirate at the end of the acquisition year will be:

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