on January 1, Year 1, Red Crown, Inc. purchased 25% of Red Hand Co.'s outstanding common shares and 40% of Red Leaf Co.'s nonvoting preferred stock. Red Crown plans to hold the investments on a long-term basis. Red hand reported net income of $300,000 for Year 1 and paid common stock dividends of $100,000. Red Leaf reported net income of $450,000 and paid preferred dividends of $200,000. On its December 31, Year 1 income statement, what amount of income from these investments should Red Crown report?

a. $105,000 b. $155,000 c. $205,000 d. $255,000