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1. ABC Co. owns 25% of the common stock of Pepsi Co. and uses the equity method to account for the investment. During 2021, Pepsi

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1. ABC Co. owns 25% of the common stock of Pepsi Co. and uses the equity method to account for the investment. During 2021, Pepsi reported income of $120,000 and paid dividends of $40,000. Pepsi owns a building with a useful life of twenty years, which was undervalued by $80,000 at the time that ABC bought its shares of Pepsi's common stock. How much equity income should ABC recognize for 2021 related to this investment

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