3) Pinata Corporation acquired an 80% interest in Smackem Inc. for $130,000 on January 1, 2011, when Smackem had Capital Stock of $125,000 and Retained Earnings of $25,000. Assume the fair value and book value of Smackem's net assets were equal on January 1, 2011. Pinata's separate income statement and a consolidated income statement for Pinata and Subsidiary as of December 31, 2011, are shown below. Smackem's separate income statement must have reported net income of A) $13,750. B) $14,750. C) $15,750. D) $15,250