Acker Inc. bought 40% of Howell Co. on January 1, 2017 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows:

Year Cost to Acker Transfer Amount held by Howell at Year-End

2017 $55,000 $ 75,000 $15,000

2018 $70,000 $110,000 $55,000

Howell reported net income of $100,000 in 2017 and $120,000 in 2018 while paying $40,000 in dividends each year.

What is the Equity in Howell Income that should be reported by Acker in 2018?

A) $32,000.

B) $41,600.

C) $48,000.

D) $49,600.

E) $50,600.

What is the balance in Ackers Investment in Howell account at December 31, 2018?

A) $624,000.

B) $636,000.

C) $646,000.

D) $656,000.

E) $666,000