Timber, Inc. acquires 10% of Lake Co. on January 1, 2022 for $ 124,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2023, Timber purchased an additional 25% of Lake for $390,000, achieving the ability to exert significant influence over Lake. On that date (i.e., Jan. 1, 2023), the fair value of Lakes common stock was $1,560,000 in total. Lakes January 1, 2023, book value equaled $1,280,000, although a land was undervalued by $ 70,000. Any additional excess cost over fair value was attributable to an undervalued patent with a 5-year remaining life. During 2023, Lake reported net income of $240,000 and paid dividends of $60,000.

Based on the above information, use the prospective approach to account for the change to the equity method and determine the following numbers.

1. The amount of annual excess amortization for 2023.

2. The amount of equity income that Timber should report for 2023.

3. The balance of Investment in Lake account at the end of 2023.