|On January 1, 20X1, Drucker, Inc. paid $425 for all of the outstanding common stock of Mort Corp. At that time, Mort had the following balance sheet:
January 1, 20X1
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Liab. and Stockholder’s Equity
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On the January 1, 20X1 date of acquisition, the book values of the current assets and liabilities equaled the fair market values of these items. The fixed assets, which had an estimated useful life of eight years and no salvage value, were worth $440.
Two years later, on December 31, 20X2, the companies have the following trial balances:
|Accum. Deprec.|| |
|Investment in Sub.|
|If the parent had used the simple equity method, what balance would Drucker have carried in its Investment in Subsidiary-Mort, Inc. account at the beginning of 20X2?