On January 1, 20X8, Pullman Company acquired 30 percent of Skate Company's common stock, at underlying book value of $100,000. Skate has 100,000 shares of $2 par value, 5 percent cumulative preferred stock outstanding. No dividends are in arrears. Skate reported net income of $150,000 for 20X8 and paid total dividends of $72,000. Pullman uses the equity method to account for this investment.Based on the preceding information, what amount would Pullman Company receive as dividends from Skate for the year?
A. $18,600
B. $21,600
C. $54,000
D. $62,000
Answer: A
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