Sunrise Designs Maintains a Credit Line with Ohio River Bank

Sunrise Designs maintains a credit line with Ohio River Bank that allows the company to borrow up to $1 million. A covenant associated with the loan contract limits the company's dividends in any one year. The 2017 income statement data for the company is as follows:
$$\begin{array} { | l | r | } \hline \text { Net sales } & \$ 840,000 \\\hline \text { Less: Cast of goads sald } & 500,000 \\\hline \text { Grass profit } & \$ 340,000 \\\hline \text { Selling and administrative expenses } & 120,000 \\\hline \text { Net aperating incame } & \$ 220,000 \\\hline \text { Gain an sale of securities } & \mathbf { 2 4 , 0 0 0 } \\\hline \text { Interest expense } & ( 4,000 ) \\\hline \text { Net income fram continuing aperations befare tax } & \$ 240,000 \\\hline \text { Less: Income tax } & \underline { 51,200 } \\\hline \text { Net income fram continuing aperations } & \$ 180,000 \\\hline \text { Dispasal of segment (net of tax) } & \mathbf { 2 2 , 0 0 0 } \\\hline \text { Net income before change in accounting principle } & \$ 210,000 \\\hline \text { Income effect due to change in accounting principle } & \underline { 52,000 } \\\hline \text { Net income } & \$ 262,000 \\\hline\end{array}$$
What is the maximum amount of dividends Sunrise can pay if the covenant is expressed as 20 percent of net operating income?

A) $44,000
B) $60,000
C) $47,200
D) $52,700