Santos Corporation is considering investing in Fenco Corporation, but is unsure about what level of ownership should be undertaken. Santos and Fenco have the following reported incomes:

Fenco paid $15,000 in cash dividends to its investors. Prepare a pro forma income statement for Santos Corporation that compares income under 10%, 30%, and 80%ownership levels.

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Santos $700,000 300,000 $400,000 120,000 $280,000 Fenco $450,000 300,000 $150,000 Cost of goods sold Gross profit Selling and administrative expenses 80,000