3. On January 1, 2021, Graham Co. acquired 40% of the outstanding voting common shares of Lenore Co. for $820,000. 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 $320,000 although it had a book value of only $24,000. 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 $350,000 in 2021 and paid a cash dividend of $95,000 to its stockholders. During 2021, Lenore sold inventory to Graham that had an original cost of $50,000. The merchandise was sold to Graham for $85,000. Of this balance, $70,000 was resold to outsiders during 2021. Required: Calculate the equity income to be reported by Graham for 2021.