Pepe, Incorporated acquired 70% of Devin Company on January 1, 2019. On that date Devin sold equipment to Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $63,000 with a remaining life of 10 years. Devin reported net income of $300,000 and $320,000 for 2019 and 2020, respectively. Pepe uses the equity method to account for its investment in Devin.

Assuming there are no excess amortizations or other intra-entity transactions, Compute the income from Devin reported on Pepe's books for 2020.

Select one:

a. $216,525.

b. $201,800.

c. $223,160.

d. $194,400.

e. $194,200.