Equity Method for Minority, Active Investments. U.S. GAAP requires firms to account for equity investments in which ownership is between 20% and 50% using the equity method. Ace Corporation owns 35% of Spear Corporation during 2014. Spear Corporation reported net income of $100.4 million for 2014 and declared and paid dividends of $25 million during the year. Support your answers with calculations.

Calculate the equity income that Ace Corporation reports in 2014 related to its ownership in Spear Corporation.