Sage, Inc. bought 35% of admas corporation's outstanding common stock on January 2, 20x1, for $400,000. The carrying amount of Adam's net assets at the purchase date totaled $900,000. Fair values and carrying amounts were the same for all items except for plant and inventory, for which fair values exceeded the carrying amounts by $90,000 and $10,000 respectively. The plant has an 18year remaining life. All inventory on hand at the beginning of the year was sold during 20x1. During 20x1, Adams reported $125,000 net income and paid a $20,000 cash dividend . What amounts should Sage report in its income statement related to its invensment in adams for the year ended December 31, 20x1, and what was the December 31, 20x1, balance in the investment in adams account?

A: Income Statement $43,750 and Balance Sheet $443,750

B: Income Statement $43,750 and Balance sheet $431,500

C: Income statement $38,500 and Balance sheet $443,750

D: Income Statement $43,750 and Balance sheet $436,750

E: Income statement $38,500 and Balance sheet $431,500