NEED EXPLANATION NOT JUST ANSWER> I HAVE THE ANSWER

Reed Company acquired 20% of the common stock of Cox Company for $500,000 on January 1, 20X1. On July 1, 20X1, Reed purchased an additional 15% of the stock of Cox for $400,000. Cox earned net income of $120,000 between January 1 and June 30 and earned $90,000 from July 1 to December 31. What is the income from the investment earned by Reed in the year 20X1? Multiple choice question. $73,500 $55,500 $37,500