Passion Products Corporation, which sells a broad line of home detergent products, owns 80 percent of the stock of Savvy Soap Company. During 20X8, Savvy sold soap products to Passion Products for $250,000, which it had produced for $200,000. Passion Products sold $130,000 of its purchase from Savvy in 20X8 and the remainder in 20X9. In addition, Passion Products purchased $400,000 of inventory from Savvy in 20X9 and resold $240,000 of the items before year-end. Savvy's cost to produce the items sold to Passion Products in 20X9 was $300,000. Assume Savvy reported net income of $500,000 for 20X9, the amount of income assigned

1. 100,400
2. 94,600
3. 103,200
4. 96,800

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