If a wholly owned subsidiary's net income was $300,000, the subsidiary declared dividends of $160,000 and the depreciation and amortization of current fair value excess was $40,000, the parent company's intercompany investment income under the equity method of accounting is:

a.

$120,000

b.

$140,000

c.

$260,000

d.

$200,000

On October 1, 2020, Puna Corporation acquired for cash all the outstanding common stock of Suna Company, which was not liquidated, Consolidated net income for the fiscal year ended December 31, 2021, includes net income of:

a.

Puna for twelve months, but no income from Suna until it declares a cash dividend

b.

Puna for twelve months and Suna for twelve months

c.

Puna for three months and Suna for three months

d.

Puna for twelve months and Suna for three months