Problem $1-30($Algo$)($LO $1-4,1-5,1-7)$

On July $1,2022,$ Burrough Company acquired $96,000$ of the outstanding shares of Carter Company for $$17$ per share. This acquisition gave Burrough a $40$ percent ownership of Carter and allowed Burrough to significantly infuence the investee's decisions.

As of July $1,2022,$ the inwestee had assets with a book value of $$4$ million and liabilities of $$1063,500.$ At the time, Carter held equipment appraised at $$262,500$ more than book value; it was considered to have a seven$-$year remaining life with no salvage value. Carter also held a copyright with a five$-$year remaining life on its books that was undervalued by $$707,500.$ Any remaining excess cost was attributable to an indefinite$-$lived trademark. Depreciation and amortization are computed using the straight$-$line method. Burrough applies the equity method for its investment in Carter.

Carter's policy is to declare and pay a $$1$ per share cash dividend every April $1$ and October $1.$ Carter's income, earned evenly throughout each year, was $$588,000$ in $2022,$ $$620,800$ in $2023,$ and $$667,400$ in $2024.$

In addition, Burrough sold inventory costing $$99,600$ to Carter for $$166,000$ during $2023.$ Carter resold $$85,000$ of this inventory during $2023$ and the remaining $$81,000$ during $2024.$

Required:

a$.$ Determine the equity income to be recognized by Burrough during each of these years.

b$.$ Compute Burrough's Investment in Carter Company's balance as of December $31,2024.$

Note: For all requirements, enter your answers in whole dollirs and not in millions.

$\backslash$table$[[$a$.$ Equity income $2022,],[$a$.$ Equity income $2023,],[$a$.$ Equity income $2024,],[$b$.$ Investment in Carter,$]]$