Page Company Purchased an 80% Interest in the Common Stock

Multiple Choice

Page Company purchased an 80% interest in the common stock of the Seed Company for $600,000 on January 1, 2019, when Seed Company had the following stockholders' equity:
$$\begin{array} { l r } \text { Common stock, } \$ 10 \text { par } & \$ 300,000 \\\text { Cumulative preferred stock, } 10 \% , \$ 10 \text { par } & 100,000 \\\text { Paid-in excess of par, common } & 50,000 \\\text { Retained earnings } & 200,000\end{array}$$ Any excess of cost over book value on the common stock purchase was attributed to goodwill.Page does not hold any of Seed's preferred stock.Seed had net income of $40,000 during 2019 and paid no dividends.

The preferred stock is two years in arrears on January 1, 2019.The controlling interest's share of Seed's 2019 net income is ____.

A) $24,000
B) $23,360
C) $25,600
D) $32,000