1. [Preferred stock] During 2017, Pop Corporation owns 20 percent of Son Corporation’s preferred stock and 80 percent of its common stock. Son’s stock outstanding on December 31, 2017, is as follows:

10% cumulative preferred stock $ 400,000 Common stock 2,800,000 Son reported net income of $240,000 for the year ended December 31, 2017. What amount should Pop record as equity in earnings of Son for the year ended December 31, 2017?

a $168,000 b $192,000 c $193,600 d $200,000