At the beginning of the question and answer portion of the annual stockholders' meeting of Revell Corporation, stockholder Carol Finstrom asks, "Why did management sell the holdings in AHM Company at a loss when this company has been very profitable during the period its stock was held by Revell?"

Since President Larry Wisdom has just concluded his speech on the recent success and bright future of Revell, he is taken aback by this question and responds, "I remember we paid \(\$ 1,100,000\) for that stock some years ago, and I am sure we sold that stock at a much higher price. You must be mistaken."

Finstrom retorts, "Well, right here in footnote number 7 to the annual report it shows that 240,000 shares, a \(30 \%\) interest in AHM, was sold on the last day of the year. Also, it states that AHM earned \(\$ 550,000\) this year and paid out \(\$ 150,000\) in cash dividends. Further, a summary statement indicates that in past years, while Revell held AHM stock, AHM earned \(\$ 1,240,000\) and paid out \(\$ 440,000\) in dividends. Finally, the income statement for this year shows a loss on the sale of AHM stock of \(\$ 180,000\). So, I doubt that I am mistaken."

Red-faced, President Wisdom turns to you.

\section*{Instructions}

Help out President Wisdom: What dollar amount did Revell receive upon the sale of the AHM stock? Explain why both Finstrom and Wisdom are correct.