West Corp. owned 70% of the voting common stock of East Co. East owned 60% of Compass Co. West and East both used the initial value method to account for their investments. The following information was available from the financial statements and records of the three companies: Operating income included unrealized intra-entity gains (which are related to inventory transfers) but did not include dividend income from investment in subsidiary.

The accrual-based income of West Corp. is calculated to be

A.

$734,000.

B.	$1,261,000.

C.	$1,123,900.

D.	$1,140,700.

E.	$1,149,700.

Compass Co. East Co. 860,000 600,000 120,000 200,000 150,000 60,000 West Corp Operating income (loss) Amount of dividends paid Unrealized intra-entity gains Amortization expense related to excess fair value over book value of investment 96,000 70,000 15,000 30,000 20,000 Compass Co. East Co. 860,000 600,000 120,000 200,000 150,000 60,000 West Corp Operating income (loss) Amount of dividends paid Unrealized intra-entity gains Amortization expense related to excess fair value over book value of investment 96,000 70,000 15,000 30,000 20,000