Assume that you are Jackson Companys accountant. Company owner Abel Terrio has reviewed the 2011 financial statements you prepared and questions the $6000 loss reported on the sale of its investment in Blackhawk Co. common stock. Jackson acquired 50000 shares of Blackhawks common stock on December 31 2009 at the cost of $500000. This stock purchase represented a 40% interest in Blackhawk. The 2010 income statement reported that earnings from all investments were $126000. On January 3 2011 Jackson Company sold the Blackhawk stock for $575000. Blackhawk did not pay any dividends during 2010 but reported a net income of $202500 for the year. Terrio believes that because the Blackhawk stock purchase price was $500000 and was sold for $575500 the 2011 income statement should report a $75000 gain on the sale.