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On January 1, 2020, Carmel Company acquired 70 percent of the outstanding voting stock of Supreme, Inc., for a total of $1,540,000 in cash and other consideration. At the acquisition date Supreme had common stock of $950,000 retained earnings of $500.000, and a noncontrolling interest fair value of $660,000. Carmel attributed the excess of fair value over Supreme's book value to various covenants with a 20-year remaining life. Carmel uses the equity method to account for its investment in Supreme. During the next two years, Supreme reported the following: Net Income Dividends Declared Inventory Purchases from Carmel 2020 $400,000 $60,000 $350,000 2021 380,000 70,000 370.000 Carmel sells inventory to Supreme using a 60 percent markup on cost. At the end of 2020 and 2021, 30 percent of the current year purchases remain in Supreme's inventory. Applying equity method, the amount Carmel will record as Equity in Supreme Earnings for 2021 would be: O $238.175 $237.500 S242,000 O $263,750