1. The separate incomes of Pil Corporation and Sil Corporation, a 100 percent-owned subsidiary of Pil, for 2012 are $2,000,000 and $1,000,000, respectively. Pil sells all of its output to Sil at 150 percent of Pil's cost of production.

During 2011 and 2012, Pil's sales to Sil were $9,000,000 and $7,000,000, respectively. Sil's inventory at December 31, 2011, included $3,000,000 of the merchandise acquired from Pil, and its December 31, 2012, inventory included $2,400,000 of such merchandise. Assume Sil sells the inventory purchased from Pil in the following year. A consolidated income statement for Pil Corporation and Subsidiary for 2012 should show controlling interest share of consolidated net income of:a. $2,200,000b. $2,800,000c. $3,000,000d. $3,200,000Pan Corporation owns 75 percent of the voting common stock of Sat Corporation, acquired at book value during 2011. Selected information from the accounts of Pan and Sat for 2011 are as follows: During 2012 Pan sold merchandise to Sat for $100,000, at a gross profit to Pan of $40,000. Half of this merchandise remained in Sat's inventory at December 31, 2012. Sat's December 31, 2011, inventory included unrealized profit of $8,000 on goods acquired from Pan.2. In a consolidated income statement for Pan Corporation and Subsidiary for the year 2012, consolidated sales should be:a. $2,900,000b. $2,800,000c. $2,725,000d. $2,700,0003. In a consolidated income statement for Pan Corporation and Subsidiary for the year 2012, consolidated cost of sales should be:a. $1,372,000b. $1,360,000c. $1,272,000d.$1,248,000

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Pan Sat Sales Cost of Sales $1,000,000 $1.800,000