Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for $450,000 on January 2, 2021. During 2021, Darby Company paid dividends of $125,000 and reported earnings for the year of $300,000. Fair market value of the stock on 12/31/21 was $450,000.

If Blanco Company appropriately used the fair value method of accounting for its investment in Darby Company, its income related to its Darby investment included in 2021 Net Income will be:

Select one:

a.

$175,000

b.

$125,000

c.

$300,000

d.

$25,000

e.

$60,000