P Corporation acquired a 60% interest in S Corporation on January 1, 2017, at book value equal to fair value. During 2017, 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, 2017. S reported net income of $120,000 for 2017. P's income from S for 2017 is:
A) $36,000.
B) $50,400.
C) $54,000.
D) $61,200.

Question

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The Answer of P Corporation acquired a 60% interest in S Corporation on January 1, 2017, at book value equal to fair value. During 2017, 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, 2017. S reported net income of $120,000 for 2017. P's income from S for 2017 is:
A) $36,000.
B) $50,400.
C) $54,000.
D) $61,200.

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