1 (2 points) Gargiulo Company, a 90% owned subsidiary of Posito Corporation, transfers inventory to Posito at a 25% gross profit rate. The following data are available pertaining specifically to Posito's intra- entity purchases from Gargiulo. Gargiulo was acquired on January 1, 2017. 2017 2018 Purchases by Posito $8,000 $12,000 Ending inventory on Posito's books 1,200 4,000 2019 $15,000 3,000 Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends. Gargiulo's net income Dividends paid by Gargiulo 2017 2018 $70,000 $85,000 2019 $94,000 10,000 10,000 15,000 Compute the equity in earnings of Gargiulo reported on Posito's books for 2018