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

Farnorth paid $15,000 in cash dividends to its investors. Prepare a pro forma income statement for Salvania Corporation that compares income under10%, 30%, and 80% ownership levels.

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Sales.. Cost of goods sold Gross profit Selling and administrative expenses Salvania $700,000 300,000 $400,000 120,000 $280,000 Farnorth $400,000 230,000 $170,000 5,000 95,000 Net income