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.

Question

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.

Quizplus · Accepted Answer

The Answer is B

P Company Owns an 80% Interest in S Company