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Balance in investment: Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting common stock

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Chapter 1, Problem 4

On January 1, Puckett Company paid $1.6 million for 50,000 shares of Harrison's voting common stock, which represents a 40 percent investment. No allocation to goodwill or other specific account was made. Significant influence over Harrison is achieved by this acquisition. Harrison distributed a dividend of $2 per share during the year and reported net income of $560,000. What is the balance in the Investment in Harrison account found in the financial records of Puckett as of December 31?

a. $1,724,000
b. $1,784,000
c. $1,844,000
d. $1,884,000

Please show calculation, thanks.

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Chapter .1.
Problem 4

Suggested answer to the problem is a $1,724,000
The cost of investment of Puckett is ...

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