The newest employee at Edwards Escrow Co., Adam Riley, is handling the escrow paperwork for the sellers and the buyers on an Anaheim property sale. When Adam goes to figure out the prorations for the month of February, for which some of the expenses have already been paid by the sellers, Adam cannot remember what number to use to figure out the proration. Which of the following should he use?

On january 2, well co. purchased 10% of rea, inc.’s outstanding common shares for $400,000, which equaled the carrying amount and the fair value of the interest purchased in rea’s net assets. well did not elect the fair value option. because well is the largest single shareholder in rea, and well’s officers are a majority on rea’s board of directors, well exercises significant influence over rea. rea reported net income of $500,000 for the year and paid dividends of $150,000. in its december 31 balance sheet, what amount should well report as investment in rea?