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Exercise No. 2 Arb Corporation acquired 25 percent of Tee Corporation's outstanding common stock on October 1, for $600,000. A summary of Tee's adjusted trial balances on this date and at December 31 follows (in thousands): December 31 October 1 Debits Current assets 5 500 S 250 Plant assetsnet 5 1,500 5 1,550 Expenses (including cost of goods sold) 5 800 S 600 Dividends (paid in July) 5 200 S 200 $ 3,000 $ 2,600 Credits Current liabilities 5 300 5 200 Capital stock (no change during the year) $1,000 5 1,000 Retained earnings January $1,500 5 500 Sales 5 1,200 5900 5 3,000 5 2,600 Arb uses the equity method of accounting. No information is available concerning the fair values of Tee's assets and liabilities. REQUIRED: 1. Determine Arb's investment income from Tee Corporation for the year ended December 31. 2. Compute the correct balance of Arb's investment in Tee account at December 31