Answer:
$ 1,125,000
Explanation:
Calculation for the amount of Equity Income that Emily will record
First step is to find the Net equity income using this formula
Net equity income= Net income +Dividends
Let plug in the formula
Net equity income=$250,000+$25,000
Net equity income=$225,000
Second step is to find the balance of investment using this formula
Balance of investment= (Common stock + Net equity income )- Amortization of unrecorded patent
Let plug in the formula
Balance of investment =($1,000,000+$225,000 )-($600,000/6)
Balance of investment=$1,225,000-$100,000
Balance of investment = $ 1,125,000
Therefore the amount of Equity Income that Emily will record will be $ 1,125,000
