P Company Regularly Sells Merchandise to Its 80%-Owned Subsidiary,S Corporation

question 7

Multiple Choice

P Company regularly sells merchandise to its 80%-owned subsidiary,S Corporation.In 2016,P sold merchandise that cost $240,000 to S for $300,000.Half of this merchandise remained in S's December 31,2016 inventory.During 2017,P sold merchandise that cost $375,000 to S for $468,000.Forty percent of this merchandise inventory remained in S's December 31,2017 inventory.Selected income statement information for the two affiliates for the year 2017 is as follows: Consolidated sales revenue for P and Subsidiary for 2017 are:

• A)$2,907,000.
• B)$3,000,000.
• C)$3,205,500.
• D)$3,375,000.

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Definitions:

Agonist

A chemical or drug that binds to receptors in the body and activates them to produce a biological response.

Stimulates

To encourage something to grow, develop, or become active.

Pharmacodynamic

The branch of pharmacology concerned with the effects of drugs and the mechanism of their action in the body.

Capsules

Small, typically cylindrical, dosage forms designed to encapsulate medicines for oral administration, aiding in ease of consumption and absorption.