Stem Corporation purchased 70 percent of the voting stock of Crown Corporation on January 1, 20X2, for \(\$ 465,000\). At that date, Crown reported common stock outstanding of \(\$ 200,000\) and retained earnings of \(\$ 350,000\). The purchase differential is assigned to buildings with an expected life of 20 years from the date of combination.

On December 31, 20X4, Stem had \(\$ 25,000\) of unrealized profits on its books from inventory sales to Crown, and Crown had unrealized profit on its books of \(\$ 40,000\) from inventory sales to Stem. All inventory held at December 31, 20X4, was sold during 20X5.

On December 31, 20X5, Stem had \(\$ 14,000\) of unrealized profit on its books from inventory sales to Crown, and Crown had unrealized profit on its books of \(\$ 55,000\) from inventory sales to Stem.

Stem reported income from its separate operations (excluding income on its investment in Crown and amortization of purchase differential) of \(\$ 118,000\) in 20X5, and Crown reported net income of \(\$ 65,000\).

\section*{Required}

Compute consolidated net income for 20X5.