This question extends Question 1 to year X2. On 111 X1, 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 12/3V /x1, Red reported $425,000 of cost of goods sold while White Company 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 until the following year. White reported a profit of $100,000 in year X1. Additional Information: During year X2, White reported a $125,000 income. Red did not sell any items to White during year X2. What is Red's year X2 income from its investment in White? Multiple Choice $120,000 $130,000 $137.500