Use the following information to answer parts 1 and 2

On January 1, 2020, Patriots Corp acquired 30,000 shares (30% of the outstanding shares) of Steelers at a price of $9.00 per share, giving it significant influence over Steelers. Steelers had net income of $250,000 for the year ended December 31, 2020 and declared and paid dividends of $80,000 to its shareholders on December 31, 2020. On the date of acquisition, Steelers net book value was $800,000 and there was no difference between the fair value and book value of Steelers identifiable net assets.

1. Assuming that there was no impairment of any goodwill relating to the acquisition of Steelers shares during 2020, what would be the balance in Patriots Corps investment in Steelers account as of December 31, 2020? (FVE method)

2. Ignore your answer above and assume that on December 31, 2020 a test for impairment of goodwill relating to the acquisition of Steelers shares indicated that goodwill was impaired by 40%. What would be the amount of investment income recorded by Patriots Corp. relating to its investment in Steelers for the year ended December 31, 2020? (2 marks)

3. Phoenix and Stampeders Inc. were combined in a purchase transaction. Phoenix was able to acquire Stampeders at a bargain price. The purchase price was less than the sum of the fair values of identifiable assets acquired less the fair value of liabilities assumed. How should this difference between the purchase price and the fair value of the net identifiable assets be accounted for?