Small Company reported 20X7 net income of $59,000 and paid dividends of $16,000 during the year. Mock Corporation acquired 30 percent of Small's shares on January 1, 20X7, for $97,000. At December 31, 20X7, Mock determined the fair value of the shares of Small to be $132,000. Mock reported operating income of $76,000 for 20X7.

Required:

Compute Mock's net income for 20X7 assuming it

1. Carries the investment in Small at fair value.
2. Uses the equity method of accounting for its investment in Small.