1. The separate incomes of Pop Corporation and Son Corporation, a 100 percent–owned subsidiary of Pop, for 2017 are $2,000 and $1,000, respectively. Pop sells all of its output to Son at 150 percent of Pop’s cost of production.

During 2016 and 2017, Pop’s sales to Son were $9,000 and $7,000, respectively. Son’s inventory at December 31, 2016, included $3,000 of the merchandise acquired from Pop, and its December 31, 2017, inventory included $2,400 of such merchandise. Assume Son sells the inventory purchased from Pop in the following year.

A consolidated income statement for Pop Corporation and Subsidiary for 2017 should show controlling interest share of consolidated net income of:

a $2,200 b $2,800 c $3,000 d $3,200 u S E THE FOLLOWING INFORMAT I O N I N ANSWERING QuEST I O N S 2 A N D 3 :