Accounting

On 1/1/19, Major Company purchased 45% of Minor Company's common stock for $630,000. Minor's book value of equity at that date consisted of $200,000 common stock and $500,000 retained earnings. On 1/1/19, any difference between the fair value of stock and book value of equity of Minor's stock is attributable to land undervalued on the books by $100,000, equipment overvalued on the books by $300,000, unrecorded customer database with a fair value of $600,000 and the remainder of the difference is attributable to goodwill. The equipment has a 10- year remaining life at 1/1/19 and the customer database’s estimated life on 1/1/19 is 6 years. During 2019, Minor reported income of $150,000 and paid dividends of $50,000. The fair value of Major’s investment in Minor stock on 12/31/19 is $750,000. Assuming that Major is an important vendor to Minor and that its ownership percentage allows membership on Minor's board of directors, answer the following questions 1.The total asset amount related to the Investment in Minor on Major’s 12/31/2019 balance sheet is 2.The Minor investment increased Major's net income in 2019