Solac Company acquires 30% of the voting stock of Talgo Corporation on January 1, 2020 for $ 25,000,000. The book value of Talgo's stock at the time of purchase was $ 40,000,000. Book values approximated fair values except for a building that was overvalued by $10,000,000 (10 year life), equipment that was undervalued by $4,000,000 (4 year life) and previously unrecorded intangibles of $ 20,000,000 (indefinite life). It is now December 31, 2022. Solac sells merchandise to Talgo at a markup of 25% on cost. Talgo sells merchandise to Solac at a markup of 20% on cost. Below are the inventory balances : Date Chapter 1 Homework December 31, 2021 December 31, 2022 Inventory held by Solac 3,000,000 3,120,000 Inventory held by Talgo 1,000,000 1,025,000 Talgo reports net income of $ 1,300,000 in 2020; $ 1,500,000 in 2021 and $ 1,600,000 in 2022. Talgo pays no dividends during this period. Required: a. Calculate equity in net income of Talgo, reported on Solac's 2022 income statement [A] b. Calculate the balance in Investment in Talgo as of December 31, 2022[B]