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.

Question

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.

Quizplus · Accepted Answer

The Answer is A

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