Question: On January 1 , 2 0 2 4 , American Corporation purchased 2 0 % of the outstanding voting shares of Short Supplies common stock

On January 1,2024, American Corporation purchased 20% of the outstanding voting shares of Short Supplies common stock for $162,000 cash. On that date, Short's book value and fair value were both $810,000. The equity method is deemed appropriate for this investment. Short's net income reported on December 31,2024, was $77,000. During 2024, Short also paid cash dividends in the amount of $22,500.
Required:
Compute the amount that would be reported for the investment on American Corporation's financial statements at December 31,2024.

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