P Co acquired an 80% interest in S Co on1/1/2014, when the book values of S assets and liabilities were equal to their fair values. The cost of the 80% interest was equal to 80% of the book value of S net assets. During 2014, P sold merchandise that cost $86,000 to S for $70,000. On 31/12/2014, three-fourths of the merchandise acquired from P remained in S inventory. Separate incomes (investment income not included) of the two companies are as follows: P S Sales Revenue 180,000 160,000 Cost of Goods Sold 120, 000 90,000 Operating Expenses 17,000 21,000 Separate incomes 43,000 49,000 What is P income from S for 2014? Select one: a. $39,200 b. $49,000 c. $ 51,200 d. $ 29, 600

P Co acquired an 80% interest in S Co on1/1/2014, when the book values of S assets and liabilities were equal to their fair values. The cost of the 80% interest was equal to 80% of the book value of S net assets. During 2014, P sold merchandise that cost $86,000 to S for $70,000. On 31/12/2014, three-fourths of the merchandise acquired from P remained in S inventory. Separate incomes (investment income not included) of the two companies are as follows: P S Sales Revenue 180,000 160,000 Cost of Goods Sold 120, 000 90,000 Operating Expenses 17,000 21,000 Separate incomes 43,000 49,000 What is P income from S for 2014? Select one: a. $39,200 b. $49,000 c. $ 51,200 d. $ 29, 600

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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