Figure:
Acker Inc Howell Reported Net Income of $100,000 in 2010 and $120,000

Figure:
Acker Inc. bought 40% of Howell Co. on January 1, 2010 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: $\begin{array}{cccc}\text { Year } & \begin{array}{c}\text { Cost to } \\\text { Acker }\end{array} & \begin{array}{c}\text { Transfer } \\\text { Price }\end{array} & \begin{array}{c}\text { Amount Held by } \\\text { Howell at Year-End }\end{array} \\2010 & \$ 55,000 & \$ 75,000 & \$ 15,000 \\2011 & \$ 70,000 & \$ 110,000 & \$ 55,000\end{array}$ Howell reported net income of $100,000 in 2010 and $120,000 in 2011 while paying $40,000 in dividends each year.
-What is the Equity in Howell Income that should be reported by Acker in 2010?

A) $10,000.
B) $24,000.
C) $36,000.
D) $38,400.
E) $40,000.