On July 1, 20X3, Barker Company purchased 20 percent of Acme Company’s outstanding common stock for $400,000 when the fair value of Acme’s net assets was $2,000,000. Barker does not have the ability to exercise significant influence over Acme’s operating and financial policies. The following data concerning Acme are available for 20X3:

In its income statement for the year ended December 31, 20X3, how much income should Barker report from this investment?

a. $20,000

b. $32,000

c. $38,000

d. $60,000

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Net income Dividends declared and paid Twelve Months Ended December 31, 20x3 $300,000 160,000 Six Months Ended December 31, 20x3 $190,000 100,000