Alex Inc, buys 40 percent of Steinbart Company on January 1, 2010, for $530,000. The equity method accounting is to be used. Steinbart's net assets on that date were $1.2 million. Any excess of cost over book value is attributable to a trade name with a 20 years remaining life, Steinbart immediately begins supplying inventory to Alex as follows:
Year Cost to Steinbart Transfer Price Amnt Hld at yr
end (trsfr price)
2010 $70,000 $100,000 $25,000
2011 96,000 150,000 45,000
Inventory held at end of one year by alex is sold at the beginning of the next.
Steinbart reports net income of $80,000 in 2010 and $110,000 in 2011 while paying $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2011?