1. On January 1, 2022, Graham Co. acquired 45% 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 $330,000 although it had a book value of only $27,000. 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 $320,000 in 2022 and paid a cash dividend of $65,000 to its stockholders.

During 2022, Lenore sold inventory to Graham that had an original cost of $50,000. The merchandise was sold to Graham for $80,000. Of this balance, $65,000 was resold to outsiders during 2022.

Required:

Calculate the investment income to be reported by Graham for 2022.