On January 1, Dynatech Corporation, a publicly traded company, purchased 25% of Hook Ltd. common shares for $826,000. At December 26, Hook declared a $40,000 dividend (Dynatech received its share of that dividend on the same day) and reported net income of $83,000. The shares fair value at December 31 was $864,000.

(a) Record each of these transactions, assuming Dynatech has significant influence over Hook and is using the equity method to account for this investment. clearly record transactions for dividends received and dynatech's share in profit.

b) How much income would Dynatech report because of its investment in Hook?