On January 1, 2012, Mehan, Incorporated Purchased 15,000 Shares of Cook

On January 1, 2012, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. On January 1, 2013 Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2012, was $1,000,000. The book value of Cook on January 1, 2013, was $1,150,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over five years. Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years: $\begin{array}{rrr}&\text { Net Income }&\text { Dividends }\\2012 & \$ 200,000 & \$ 50,000 \\2013 & 225,000 & 50,000 \\2014 & 250,000 & 60,000\end{array}$ On April 1, 2014, just after its first dividend receipt, Mehan sells 10,000 shares of its investment.
How much income did Mehan report from Cook during 2013?

A) $90,000.
B) $110,000.
C) $67,500.
D) $87,500.
E) $78,750.