Piemon Company routinely receives goods from its 80%-owned subsidiary, Siemon Corporation. In 20X4, Siemon sold merchandise that cost $60,000 to Piemon for $90,000. Half of this merchandise remained in Piemon's December 31, 20X4 inventory. This inventory was sold in 20X5. During 20X5, Siemon sold merchandise that cost $150,000 to Piemon for $200,000. One-fifth of the 20X5 merchandise inventory remained in Piemon's December 31, 20X5 inventory. Selected income statement information for the two affiliates for the year 20X5 was as follows:
Piemon Company routinely receives goods from its 80%-owned subsidiary, Siemon Corporation. In 20X4, Siemon sold merchandise that cost $60,000 to Piemon for $90,000. Half of this merchandise remained in Piemon's December 31, 20X4 inventory. This inventory was sold in 20X5. During 20X5, Siemon sold merchandise that cost $150,000 to Piemon for $200,000. One-fifth of the 20X5 merchandise inventory remained in Piemon's December 31, 20X5 inventory. Selected income statement information for the two affiliates for the year 20X5 was as follows:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Piemon Company routinely receives goods from its 80%-owned subsidiary, Siemon Corporation. In 20X4, Siemon sold
merchandise that cost $60,000 to Piemon for $90,000. Half of this merchandise remained in Piemon's December 31, 20X4
inventory. This inventory was sold in 20X5. During 20X5, Siemon sold merchandise that cost $150,000 to Piemon for
$200,000. One-fifth of the 20X5 merchandise inventory remained in Piemon's December 31, 20X5 inventory.
Selected income statement information for the two affiliates for the year 20X5 was as follows:
Piemon Siemon
Sales revenue 500,000 400,000
COGS 350,000 250,000
Oper. Exp. 50,000 70,000
Separate income 100,000 80,000
What was Piemon's income from Siemon in 20X5?
Select one:
a. $64,000
b. $61,000
c. $68,000
d. $44,000
e. $56,000
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