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Compute the income related to this investment for year

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Question - Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for $600,000 on January 2, 2018. During 2018, Darby Company declared dividends of $100,000 and reported earnings for the year of $400,000.

If Blanco Company uses the fair value method of accounting for its investment in Darby Company, compute the income related to this investment for year 2018?

a. $100,000.

b. $400,000.

c. $20,000.

d. $80,000.

Reference no: EM132699371

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