On January 1, 2010, Palmer, Inc. bought 40% of the outstanding shares of Arnold Corporation at a cost of $137,000. The equity method of accounting for this investment is used. During 2010, Arnold Corporation reported $30,000 of net income and paid $10,000 in cash dividends. At the end of 2010, the shares had a market value of $150,000. How much income will Palmer report from the Arnold investment during 2010? Select one: a. $12,000 b. $30,000 c. $10,000 d. $4,000