Answer was D) but I need help with steps as to how

On January 1, 2010, Cale Corp. paid $1,020,000 to acquire Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' equity accounts: Current assets : Book Value : $120,000 Fair Value : $120,000

Land : Book Value : $72,000 Fair Value : $192,000

Building (20 year life ) : Book Value : $240,000 Fair Value : $268,000

Equipment : (10 year life) : Book Value : $540,000 Fair Value : $516,000

Current Liabilities : Book Value : $24,000 Fair Value : $24,000

Long Term Liabilities : Book Value : $120,000 Fair Value : $120,000

Common Stock : Book Value : $228,000

Additional Paid In Capital : Book Value : $384,000

Retained Earnings : Book Value : $216,000

Kaltop earned net income for 2010 of $126,000 and paid dividends of $48,000 during the year

Question :

In Cale's accounting records, what amount would appear on December 31, 2010 for equity in subsidiary earnings? A. $77,000. B. $79,000. C. $125,000. D. $127,000. E. $81,800.