On January 1,2019,Palmer,Inc

Multiple Choice

On January 1,2019,Palmer,Inc.bought 40% of the outstanding shares of Arnold Corporation at a cost of $137,000.Palmer uses the equity method of accounting for this investment.During 2019,Arnold Corporation reported $30,000 of net income and paid a total of $10,000 in cash dividends.At the end of 2019,the shares had a fair value of $150,000.
-At the end of 2019,the shares had a fair value of $150,000.What is the amount of Equity in investee earnings for 2019?

A) $4,000.
B) $12,000.
C) $13,000.
D) $21,000.