REFERENCE: Ref.05_11 Pepe,Incorporated Acquired 60% of Devin Company on January 1,2009.On That

Multiple Choice

REFERENCE: Ref.05_11
Pepe,Incorporated acquired 60% of Devin Company on January 1,2009.On that date Devin sold equipment to Pepe for $45,000.The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a remaining life of 9 years.Devin reported net income of $300,000 and $325,000 for 2009 and 2010,respectively.Pepe uses the equity method to account for its investment in Devin.
-Compute the income from Devin reported on Pepe's books for 2010.

A) $190,200.
B) $196,000.
C) $194,400.
D) $187,000.
E) $195,000.