Ramiro Company purchased 40% of the outstanding stock of Marco Company on January 1. Marco reported net income of $95,000 and declared dividends of $35,000 during the year. How much would Ramiro adjust its investment in Marco Company under the equity method?

Equity Method

An accounting technique used to record investments in other companies, reflecting the investor's share of the investee's profits or losses.

Outstanding Stock

Shares of a company that have been issued and are currently held by investors.

Net Income

The net income a company earns following the subtraction of all costs, taxes, and expenses from its total revenue.