Pouch Corporation acquired an 80% interest in Shenley Corporation on January 1, 2014, when the book values of Shenley's assets and liabilities were equal to their fair values. The cost of the 80% interest was equal to 80% of the book value of Shenley's net assets. During 2014, Pouch sold merchandise that cost $70,000 to Shenley for $86,000. On December 31, 2014, three-fourths of the merchandise acquired from Pouch remained in Shenley's inventory. Separate incomes (investment income not included) of the two companies are as follows:

Pouch Shenley

Sales Revenue $180,000 $160,000

Cost of Goods Sold 120,000 90,000

Operating Expenses 17,000 21,000

Separate incomes $ 43,000 $ 49,000

What is Pouch's income from Shenley for 2014?

	A.	$39,200
	B.	$27,200
	C.	$49,000
	D.	$29,600