Calculating Income for Equity Method Investments

Kross Company purchases an equity investment in Penno Company at a purchase price of $5 million, representing 42% of the outstanding stock and book value of Penno. During the current year, Penno reports net income of $600,000 and pays cash dividends of $200,000. At the end of the year, the market value of Kross's investment is $5.3 million. What amount of income does Kross report relating to this investment in Penno for the year? $Answer