Coop Incorporated Owns 40percent of Chicken Incorporated

Coop Incorporated owns 40percent of Chicken Incorporated. Both Coop and Chicken are corporations. Chicken pays Coop a dividend of $10,000 in the current year. Chicken also reports financial accounting earnings of $20,000 for that year. Assume Coop follows the general rule of accounting for investment in Chicken. What is the amount and nature of the book-tax difference to Coop associated with the dividend distribution (ignoring the dividends received deduction) ?

A) $2,000 unfavorable.
B) $2,000 favorable.
C) $10,000 unfavorable.
D) $10,000 favorable.
E) None of the choices is correct.