Problem
On January 1, 20x1, Prole Co. acquired 40 percent of the common shares of Stub Co. for $200,000 cash. Stub Co reported net income of $70,000 and paid dividends of $40,000 for both 20x1 and 20x2. The fair value of shares of Stub Co. held by Prole Co. was $210,000 and $205,000 on December 31, 20x1 and 20x2.
Based on the information, what amount will be reported by Prole Co. as income from its investment in Stub Co. for 20x2, if it used the equity method of accounting? (xx,xxx)