1. Sam Corporation has 100,000 outstanding shares of $10 par common stock and 5,000 outstanding shares of $100 par, cumulative, 10 percent preferred stock. Sam’s net income for the year is $300,000, and its stockholders’ equity at year end is as follows (in thousands):
10% cumulative preferred stock, $100 par ..... $ 500
Common stock, $10 par ............ 1,000
Additional paid-in capital ............ 600
Retained earnings ............... 400
Total Stockholders’ Equity ........... $2,500
Par Corporation owns 60 percent of the outstanding common stock of Sam, acquired at a fair value equal to book value several years ago. Compute Par’s investment income for the year and the balance of its Investment in Sam account at the end of the year.