Can you show me how to get this answer $90,000

On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000.At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000.The equipment has a five year estimated remaining life.

Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively.Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively.

Topic: Intercompany Sale of Depreciable Assets - Cost Method

LO: 6

41. Assume Republic uses the cost method to account for its investment in Barre. What is the balance in the pre-consolidation Income (loss) from Subsidiary account for 2020?

a.$245,750

b. $165,000

c.$ 90,000

d. $ 88,750

Answer: c