P Company Owns an 80% Interest in S Company

question 31

Multiple Choice

P Company owns an 80% interest in S Company.During 2017,S sells merchandise to P for $200,000 at a profit of $40,000.On December 31,2017,50% of this merchandise is included in P's inventory.Income statements for P and S are summarized below: Controlling interest in consolidated net income for 2017 is:

• A)$300,000.
• B)$380,000.
• C)$396,000.
• D)$420,000.

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Definitions:

Gray Marketing

The legal, but unofficial, distribution of products through channels not authorized by the original manufacturer or trademark owner.

Prescription Drugs

Medications that legally require a medical prescription to be dispensed, typically regulated due to their potency, side effects, or potential for abuse.

College Tuition

The fee or charge for instruction at a college, university, or similar educational institution.

Soft Drink

A non-alcoholic beverage, usually carbonated, flavored, and sweetened, such as soda, colas, or other flavored carbonated drinks.