On January 1,2014,Stillman Inc.purchased 30 percent of the outstanding common stock of Overrun Corporation for $516,000 cash.Stillman is accounting for this investment using the equity method.On the date of acquisition,the fair value of Overrun' net assets was $1,240,000.Stillman has determined that the excess of the cost of the investment over its share of Overrun' net assets is attributable to goodwill.Overrun' net income for the year ended December 31,2014,was $360,000.During 2014,Overrun declared and paid cash dividends of $40,000.There were no other transactions between the two companies.Ignoring income taxes,Stillman' statement of income for the year ended December 31,2014,should include "Income From Investment in Overrun Corporation Stock" in the amount of

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Under the equity method, Stillman Inc. would recognize its share of Overrun's net income. Stillman owns 30% of Overrun, so it would recognize 30% of $360,000, which is $108,000, as "Income From Investment in Overrun Corporation Stock." Dividends do not affect the income recognized under the equity method.