Question: 2 . On January 1 , 2 0 2 3 , Graham Co . acquired 4 0 % of the outstanding voting common shares of

2. On January 1,2023, Graham Co. acquired 40% of the outstanding voting common shares of Lenore Co. for $800,000. On that date, Lenore reported assets and liabilities with book values of $2,400,000 and $800,000, respectively. A building owned by Lenore had an appraised value of $330,000 although it had a book value of only $275,000. This building had a 10-year remaining life and no salvage value. It was being depreciated on the straight-line basis.
Lenore generated net income of $315,000 in 2023 and paid a cash dividend of $55,000 to its stockholders.
During 2023, Lenore sold inventory to Graham that had an original cost of $60,000. The merchandise was sold to Graham for $85,000. Of this balance, $70,000 was resold to outsiders during 2023.
Required:
Calculate the investment income to be reported by Graham for 2023.

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