Frankfort Corporation purchases an investment in Bradley, Inc. at a purchase price of $9.8 million cash, representing 40% (at book value) of Bradley. During the year, Bradley reports net income of $1,680,000 and pays $413,000 of cash dividends. At the end of the year, the market value of Frankfort's investment is $11.9 million. What amount of equity earnings would be reported by Frankfort Corporation? A. $165,000 B. $672,000 C. $507,000 D. $1,267,000 E. None of the above
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