CFA Level 2
Financial Reporting and Analysis
Equity Method Investment Calculation
Very Hard Intercorporate Investments Equity Method
ABC Corporation acquired a 30% stake in XYZ Inc. for $1 million on January 1, 2022. XYZ Inc. reported net income of $800,000 and declared dividends of $200,000 in the year 2022. ABC Corporation uses the equity method for its investment in XYZ Inc.
As of December 31, 2022, what amount should ABC Corporation report as its investment in XYZ Inc. on its balance sheet?
Hint
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