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Analyzing and Interpreting Equity Method Investments Stober Company purchases an investment in Lang Company at a purchase price of $1.2 million cash, representing 30% of the book value of Lang. During the year, Lang reports net income of $110,000 and pays cash dividends of $50,000. At the end of the year, the fair value of Stober's investment is $1.25 million a. At what amount is the investment reported on Stober's balance sheet at year-end? $1,200,000 b. What amount of income from investments does Stober report? $ 50,000 c. Stober's $200,000 unrealized gain in investment fair value (choose one): (1) Is not reflected on either its income statement or balance sheet (2) Is reported in its current income (3) Is reported on its balance sheet only (4) Is reported in its other comprehensive income (1) Is not reflected on either its income statement or balance sheet d. Prepare journal entries to record the transactions and events above. General lournal General Journal Description Debit Credit Investment in Lang Cor 0 1,200,000 1. Cash 0 1,200,000 To purchase stock in Lang Company 2. Investment in Lang Cor 0 60,000 60,000 Investment Income 0 To recognize share of Lang income. 3. Cash 60,000 0 Investment in Lang C 60,000 0 To record dividend received. e. Post the journal entries from d to their respective T-accounts. Investment in Lang Company (A) Cash (A) Investment Income (R) 0 v 0 1,200,000 0 1 1 1 110,000 0 0 0 v 0 60,000 110,000 2. 0 2. 2. 0 60,000 110,000 3. 0 3. 0 3. 0v f. Record each of the transactions from d in the financial statement effects template. Income Statement Balance Sheet Liabilities Transaction Cash Asset Noncash Assets Contrib. Capital Earned Capital Expenses Net Income Revenues Purchase stock in Lang Company (1,200,000) 0 $ 0 0 $ 1,200,000 0 $ 0 0 Recognize share of Lang income 60,000 0 60,000 + 0 x 60,000 0 Receive dividend from Lang (50,000) x 0 + (50,000) 0 0 0 0 0