Reference no: EM132579578

Question - Franklin purchases 40 percent of Johnson Company on January 1 for $583,700. Although Franklin did not use it, this acquisition gave Franklin the ability to apply significant influence to Johnson's operating and financing policies. Johnson reports assets on that date of $1,508,000 with liabilities of $520,000. One building with a seven-year remaining life life is undervalued on Johnson's books by $201,250. Also, Johnson's book value for its trademark (10-year life) is undervalued by $270,000. During the year, Johnson reports net income of $138,000 while declaring dividends of $70,000. What is the Investment in Johnson Company balance (equity method) in Franklin's financial records as of December 31?