Acker Inc. bought 40% of Howell Co. on January 1, 2012 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows: $\begin{array}{llll}& \text { Cost to } & \text { Transfer } & \text { Amount Held by } \
\text { Year } & \text { Acker } & \text { Price } & \text { Howell at Year-End }\\hline
2012 & \mathbf{\$} 55,000 & \$ 75,000 & \$ 15,000 \
2013 & \$ 70,000 & \$ 110,000 & \$ 55,000
\end{array}$ Howell reported net income of $100,000 in 2012 and $120,000 in 2013 while paying $40,000 in dividends each year. What is the Equity in Howell Income that should be reported by Acker in 2012?

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The Answer of Acker Inc. bought 40% of Howell Co. on January 1, 2012 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows: $\begin{array}{llll}& \text { Cost to } & \text { Transfer } & \text { Amount Held by } \
\text { Year } & \text { Acker } & \text { Price } & \text { Howell at Year-End }\\hline
2012 & \mathbf{\$} 55,000 & \$ 75,000 & \$ 15,000 \
2013 & \$ 70,000 & \$ 110,000 & \$ 55,000
\end{array}$ Howell reported net income of $100,000 in 2012 and $120,000 in 2013 while paying $40,000 in dividends each year. What is the Equity in Howell Income that should be reported by Acker in 2012?

Acker Inc Bought 40% of Howell Co Howell Reported Net Income of $100,000 in 2012 and $120,000