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:

Mort Corp.
Balance Sheet
January 1, 20X1
  
Assets
Liab. and Stockholder’s Equity
    
Current Assets
$ 100 
Liabilities
$ 250 
Fixed Assets
400 
Common Stock
25 
 
    
Retained Earn.
225 
Total
500 
Total
500 

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:

 
Drucker, Inc.
Mort Corp.
 
dr (cr)
dr (cr)
Current Assets
975 
230 
Fixed Assets
 
400 
Accum. Deprec. 
(100)
Investment in Sub.
485 
 
Liabilities
(350)
(220)
Common Stock
(100)
(25)
Retained Earn.
(1,070)
(275)
Dividends Paid
250 
90 
Revenue
(970)
(800)
Expenses
880 
700 
Sub. Income
 (100)
    
 
    0 
  0 

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?

Answer:



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