A subsidiary, Boston Corp, is wholely acquired by Massachusetts Co. on January 1, 2015 for $10 million. The subsidiary's book value at the date of acquisition was $2 million. Following is the information for the subsidiary's identifiable net assets at the date of acquisition: Fair Value Excess FIFO $200,000 Inventories are overvalued fi.e.. book value fair value) Identifiable intangibles is undervalued Long-term debt is undervalued 5.000.000 Straight-line, 5 years Straight-line, 2 years 300,000 Inventories (based on FIFO costing assumption) are sold in 2015. The subsidiary did not declare any dividends during this period. The subsidiary reported net income as follows: Net Income Year 2015 $1,500,000 2016 2,500,000 2017 2,000,000 The parent uses the equity method to report its investment on its own books. Equity in the Subsidiary's net income for 2017, reported on the parent's books, is: Multiple Choice 650,000 350.000 2.350.000 1,000,000