Peregrine Corporation acquired an 80% interest in Serine Corporation in 2011 at a time when Serine's book values and fair values were equal to one another

On January 1, 2014, Serine sold a truck with a $55,000 book value to Peregrine for $100,000. Peregrine is depreciating the truck over 10 years using the straight-line method. The truck has no salvage value. Separate incomes for Peregrine and Serine for 2014 were as follows:
Peregrine Serine
Sales $1,800,000 $1,050,000
Gain on sale of truck 45,000
Cost of Goods Sold (750,000) (285,000)
Depreciation expense (450,000) (135,000)
Other expenses (180,000) (450,000)
Separate incomes $ 420,000 $ 225,000

Peregrine's investment income from Serine for 2014 was
A) $108,000.
B) $144,000.
C) $147,600.
D) $180,000.

C) Serine reported income $225,000
Less: Intercompany gain on truck (45,000)
Plus: Recognition of gain ($45,000 / 10) 4,500
Serine's adjusted income 184,500
Majority percentage 80%
Income from Serine $147,600