Sage Inc. bought 40% of Adams Corporation's outstanding common stock on January 2,2017 , for $400,000. The carrying amount of Adams'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 18-year remaining life. All inventory on hand at the beginning of the year was sold during 2017. During 2017, Adams reported $120,000 net income and paid a $20,000 cash dividend. Required: 1. What amount should Sage report in its income statement from its investment in Adams for the year ended December 31, 2017? 2. What is the December 31,2017 , balance in the Investment in Adams account? 3. Assume that on January 2, 2017, when Sage acquired a 40% interest in Adams, it elected to account for this investment at fair value. If the fair value of Sage's investment in Adams is $470,000 on December 31, 2017, what amount should Sage report in its 2017 income statement for this investment under the fair value option