MC Qu$.05-52$ On January $1,2022,$ Pop...

On January $1,2022,$ Pop Co$.$ acquired $75\%$ of the outstanding common shares of Soda Inc. for $$161,250$ cash. On that date, Soda had

common shares of $$156,250$ and retained earnings of $$31,250.$ At acquisition, the identifiable assets and liabilities of Soda had fair values

that were equal to carrying amounts except for inventory, which had fair value $$8,000$ greater than carrying amount and plant and

equipment, which had fair values $$10,000$ greater than carrying amounts. The plant and equipment had a remaining useful life of $5$ years

on January $1,2022.$Any goodwill will be tested yearly for impairment.

Balance sheets as of December $31,2022$ are presented below:

For $2022,$ Soda Inc. reported net income of $$37,000$ and paid dividends of $$15,000.$ Pop Co$.$ reported net income for $2022$ of $$50,000$

and paid dividends of $$25,000.$

An impairment test on goodwill conducted on December $31,2022,$ indicated that a $$500$ loss had occurred.

Under the equity method, what is the amount that Pop would report for "investment income" from Soda for the year ending December $31,$

$2022?$

A$)$ $$19,875$

B$)$ $$27,750$