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.

How much income did Harley report from Bike for 2018?

Multiple Choice

$200,000

$300,000

$320,000

$120,000

$500,000