P Corporation Acquired a 60% Interest in S Corporation on January

question 7

Multiple Choice

P Corporation acquired a 60% interest in S Corporation on January 1, 2014, at book value equal to fair value.During 2014, P sold merchandise that cost $135,000 to S for $189,000.One-third of this merchandise remained in S's inventory at December 31, 2014.S reported net income of $120,000 for 2014.P's income from S for 2014 is:

• A)$36,000.
• B)$50,400.
• C)$54,000.
• D)$61,200.

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