Pouch Corporation acquired an 80% interest in Shenley Corporation on January 1, 2014, when the book values of Shenley'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 Shenley's net assets. During 2014, Pouch sold merchandise that cost $70,000 to Shenley for $86,000. On December 31, 2014, three-fourths of the merchandise acquired from Pouch remained in Shenley's inventory. Separate incomes (investment income not included) of the two companies are as follows:

The consolidated income statement for Pouch Corporation and subsidiary for the year ended December 31, 2014 will show consolidated cost of sales of
$148,000.
$120,000.
$210,000.
$136,000.

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Amortization Table Monthly Unpaid Balance Payment Unpaid Balance at Interest Reduction in Date Beginning of Month Payment Expense Principal of Debt at End of Period Sep. 30 340000 2000 -18700 340000 338000 Oct. 31 338000 2000 336000 Nov. 30 336000 2000 334000