Fagus, Inc. acquired 40% of Tennos Corp.'s voting stock on January 1, 20X7 for $450,000. During 20X7, Tennos earned $200,000 and paid dividends of $100,000. Faguss 40% interest in Tennos gives Fagus the ability to exercise significant influence over Tennoss operating and financial policies. During 20X8, Tennos earned $220,000 and paid dividends of $50,000 on April 1 and $50,000 on October 1. On July 1, 20X8, Fagus sold half of its stock in Tennos for $320,000 cash.

A. Before income taxes, what amount should Fagus include in its 20X7 income statement as a result of the investment?

B. What should be the carrying amount or book value of this investment in Faguss December 31, 20X7 balance sheet.

C. What should be the gain or loss on the sale of this investment in Faguss 20X8 income statement?