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Ravine Corporation purchased 40 percent ownership of Valley Industries for $114,400 on January 1, 20X6, when Valley had capital stock of $241,000 and retained earnings

Ravine Corporation purchased 40 percent ownership of Valley Industries for $114,400 on January 1, 20X6, when Valley had capital stock of $241,000 and retained earnings of $45,000. During the period of January 1, 20X6, through December 31, 20X9, the market value of Ravine's investment in Valley's stock increased by $10,000 each year. The following data were reported by the companies for the years 20X6 through 20X9:

Dividends Declared
Year Operating Income, Ravine Corporation Net Income, Valley Industries Ravine Valley
20X6 $ 146,000 $ 46,000 $ 75,000 $ 36,000
20X7 90,000 66,000 75,000 56,000
20X8 232,000 10,000 95,000 40,000
20X9 166,000 56,000 105,000 36,000

Required: a. What net income would Ravine Corporation have reported for each of the years, assuming Ravine accounts for the intercorporate investment either by carrying the investment at fair value, or by using the equity method?

Net Income
Year Fair Value Equity Method
2016 ? 164400
2017 ? 116400
2018 ? 236000
2019 ? 188400

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