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Balance of Swanson Company's Investment in Life Products Inc

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On January 1, 2008, Swanson Company buys 300,000 shares of Life Products Inc.'s common stock for $1,800,000, the book value of the shares. This purchase gave Swanson a 30% ownership interest in Life Products Inc. and the ability to exercise significant influence over decision making. During 2008, Life Products Inc. reported $500,000 in net income and paid a common stock dividend of $1.20 per share. What is the balance in Swanson's Investment in Life Products Inc. account at December 31, 2008?

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The solution computes Balance of Swanson Company's Investment in Life Products Inc's account at year end.

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