Right Company purchased 14,000 common shares (25%) of ON Inc. on January 1, Year 11, for $264,000. The right uses the equity method to report its investment in ON because it has a significant influence on the operating and investing decisions made by ON. The right has no legal obligation to pay any of ON’s liabilities and has not committed to contribute any more funds to ON. Additional information for ON for the four years ending December 31, Year 14, is as follows:

Year	Net Income			Dividends Paid		Market Value per Share at December 31
Year 11	$	340,000			$76,000	$22
Year 12		(440,000)			$76,000	11
Year 13		(540,000)			0	1
Year 14		(640,000)			0	0

(a) Calculate the balance in the investment account for each of the Years 11 through 14. Assume that the market value is used in determining whether the investment is impaired.

	Year 11	Year 12	Year 13	Year 14
Investment, beginning of year	$	$	$	$
Cost
Equity method income
Dividends received
Impairment loss
Investment, end of year	$	$	$	$

b) Determine the total income to be reported by Right from its investment in ON for each of the Years 11 through 14.

Equity method income	$	$	$	$
Impairment loss
Total income	$	$	$

Answer rating: 100% (QA)

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