On January 1, 20X7, Pale Corp. paid $1,020,000 to acquire Spinner Co.Spinner maintained separate incorporation.

The following information is available for Spinner's assets, liabilities, and stockholders' equity accounts on January 1, 20X7:

Amountsare Debits or (Credits)Book valueFair valueCurrent assets120,000120,000Land72,000192,000Building (20-year remaining life)240,000268,000Equipment (10-year remaininglife)540,000540,000Total assets972,000Liabilities(144,000)(144,000)Common stock (no par)(602,000)Retained earnings(216,000)Total liabilitiesand SE(972,000)

ASSUME PALE uses theinitial value methodto account for its investment in Spinner.

Spinner earned net income for 20X7 of $126,000 and paid dividends of $48,000 during the year.

Pale earned income for 20X7 of $400,000 before considering any of the results or activities of Spinner.Pale did not pay dividends in 20X7.

A. What will Pale report as income from Spinner on Pale'sseparate income statement for 20X7?("Income from Spinner" is intended to be a generic title to replace equityin income of investee, dividend income, etc.)

B. Answertrueorfalseto this statement: Consolidated net income will be the same amount as if Pale had used the Partial Equity Method.(Just type either true or false as your answer.)