On January 4, 2017, Harley, Inc. acquired 40% of the outstanding common stock of Bike Co. for $2,400,000. This investment gave Harley the ability to exercise significant influence over Bike. Bikes assets on that date were recorded at $10,500,000 with liabilities of $4,500,000. There were no other differences between book and fair values.

During 2017, Bike reported net income of $500,000. For 2018, Bike reported net income of $800,000. Dividends of $300,000 were paid in each of these two years.

40. How much income did Harley report from Bike for 2017?

A) $120,000.

B) $200,000.

C) $300,000.

D) $320,000.

E) $500,000.

41. How much income did Harley report from Bike for 2018?

A) $120,000.

B) $200,000.

C) $300,000.

D) $320,000.

42. What was the reported balance of Harleys Investment in Bike Co. at December 31, 2017?

A) $880,000.

B) $2,400,000.

C) $2,480,000.

D) $2,600,000.

43. What was the reported balance of Harleys Investment in Bike Co. at December 31, 2018?

A) $2,400,000.

B) $2,480,000.

C) $2,500,000.

D) $2,680,000.