Val Corporation paid $290,000 for 40 percent of the outstanding common stock of Wat Corporation on January 2, 2012. During 2012, Wat paid dividends of $48,000 and reported net income of $108,000. A summary of Wat's stockholders' equity at December 31, 2011 and 2012, follows (in thousands):

REQUIRED: Calculate Val Corporation's income from Wat for 2012 and its Investment in Wat account balance at December 31, 2012. Assume the book value of all assets and liabilities equals the fairvalue.

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December 31. 2011 2012 8% cumulative preferred stock, $100 par S100 300 10 S100 Common stock, S10 par Premium on preferred stock Other paid-in capital Retained earnings Total stockholders' equity 300 10 90 160 90 100 $660 $600