Determine what amount of equity income will emily record

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Problem 1: Emily Corporation purchased all of Ace Companys common stock on Jan 1 2020 for 1,000,000 cash. The investees stockholder equity amounted to 400,000. The excess of 600 000 was due to an unrecorded patent with a six year life. in 2020 Ace reported net income of 250,000 and paid dividends of 25,000. For 2020 what amount of equity income will emily record???

Option A. 150,000

Option b. 125,000

Option c. 175 000

Option d. 825,000

Reference no: EM132485278

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