Acker Inc. bought 40% of Howell Co. on January 1, 2012 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:

YR. COST TO ACKER TRANSFER PRICE AMT HELD BY HOWELL @ YR END

2012 $55,000 $75,000 $15,000

2013 $70,000 $110,000 $55,000

Howell reported net income of $100,000 in 2012 and $120,000 in 2013 while paying $40,000 in dividends each year. What is the Equity in Howell Income that should be reported by Acker in 2013?

$32,000.

$41,600.

$48,000.

$49,600.

$50,600.