Answer:
The $1,724,000 is the investment amount which is to be recorded as of December 31.
Explanation:
For computing the investment income, the calculation is shown below:
= Paid value + net income percentage - dividend
where,
Paid value= $1.6 million
Net income percentage = Net income × percentage
= $560,000 × 40%
= $224,000
And, dividend = number of shares × per share
= 50,000 × 2
= $100,000
So, the investment amount would be
= Paid amount + net income percentage - dividend
= $1,600,000 + $224,000 - $100,000
= $1,724,000
Hence, the $1,724,000 is the investment amount which is to be recorded as of December 31.
