Pencil Company purchased 40 percent ownership of Stylus Corporation on January 1, 20X1, for $153,000. Styluss balance sheet at the time of acquisition was as follows:

STYLUS CORPORATION
Balance Sheet
January 1, 20X1
Assets								Liabilities and Equities
Cash					$	36,000		Current Liabilities	$	34,000
Accounts Receivable						125,000		Bonds Payable		254,000
Inventory						85,000		Common Stock		198,000
Land						155,000		Additional Paid-In Capital		34,000
Buildings & Equipment	$	316,000
Less: Accumulated Depreciation		(129,000	)			187,000		Retained Earnings		68,000
Total Assets					$	588,000		Total Liabilities & Equities	$	588,000

During 20X1 Stylus Corporation reported net income of $30,000 and paid dividends of $10,000. The fair values of Styluss assets and liabilities were equal to their book values at the date of acquisition, with the exception of buildings and equipment, which had a fair value $29,000 above book value. All buildings and equipment had remaining lives of five years at the time of the business combination. The amount attributed to goodwill as a result of its purchase of Stylus shares is not impaired. Required: a. What amount of investment income will Pencil Company record during 20X1 under equity-method accounting? b. What amount of income will be reported under the cost method? c. What will be the balance in the investment account on December 31, 20X1?