The following is selected information from Murphy Company for the fiscal years ended December 31, 2015; Murphy Company had net income of $500,000. Depreciation was $50,000 purchases of plant assets were $250,000, and disposals of plant assets for $500,000 resulted in a $20,000 gain. Stock was issued in exchange for an outstanding note payable of $925,000. Accounts receivable decreased by $25,000. Accounts payable decreased by $10,000. Dividends of $200,000 were paid to shareholders. Murphy Company had interest expense of $5,000. Cash balance on January 1, 2015 was $250,000. Requirements: Prepare Murphy Company's statement of cash flows for the year ended December 31, 2015 using the indirect method. On January 1, 2015, Baker Company purchased 10,000 shares of the stock of Murphy, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $70,000, and represents a 25% ownership stake. Murphy made $20,000 of net income in 2015, and paid dividends of $10,000. The price of Murphy's stock increased from $20 per share at the beginning of the year, to $22 per share at the end of the year. Requirements: a. Prepare the January 1 and December 31 general journal entries for Baker Company. b) How much should the Baker Company report on the balance sheet for the investment in Murphy at the end of 2015