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On 1VX1, Red Incorporated purchased 80% of White Company's outstanding common stock for $800,000. At the time, White reported $500,000 of capital stock and $500,000
On 1VX1, Red Incorporated purchased 80% of White Company's outstanding common stock for $800,000. At the time, White reported $500,000 of capital stock and $500,000 of retain earnings. On 12/31/X1, Red reported $425,000 of cost of goods sold while White Compony reported $260,000 of cost of sales. During the current year, Red incorporated sold inventory costing $125,000 to White Company for $187,500,60% of these goods are not resold by White Company unth the following year. White reported a profit of $100,000 in year X1. What is Red's year XI income from its investment in White? Multiple Choice $30,000 $42.500 $50,000 $80,000
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