Question: On January 2 , 2 0 2 0 , Carrier Corporation bought 1 5 % MTG Corporation s capital stock for $ 3 0 ,

On January 2,2020, Carrier Corporation bought 15% MTG Corporations capital stock for $30,000. Carrier accounts for this investment by the cost method. MTGs net income for the years ended December 31,2020 and December 31,2021, were $10,000 and $50,000, respectively. During 2021 MTG declared a dividend of $70,000. No dividends were declared in 2020. How much should MTG show on its 2021 income statement as income from this investment?
a. $1,575
b. $7,500
c. $9,000
d. $10,500

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