On June 30, year 1, Purl Corp. issued $150,000 shares of its $20 par common stock for which it received all of Scott Corp's common stock. The fair value of the commons stock issued is equal to the book value of Scott Corp.'s net assets. Both corporations continued to operate as separate businesses, maintaining accounting records with years ending December 31. Net income from separate company operations and dividends paid were (Please show work)

Purl Scott

Net income for six months ended - Jun 30, year 1 $750,000 $225,000

Net income for six months ended - Dec 31, year 1 825,000 375,000

Dividends paid - March 25, year 1 950,000 ----

Dividends paid - November 15, year ---- 1 300,000

On December 31, year 1 Scott held in its inventory merchandise acquired from Purl on December 1, year 1, for $150,000, which included a $45,000 markup. In the year 1 consolidated income statement, net income should be reported at ?