Answer: 4). In 2019, Seattle Co. sold merchandise to its parent company, Portland Ltd. At the end of 2019, there as $10,000 In unrealized profits. Portland sold the remaining merchandise in 2020. Which company will be axed on the unrealized profit and in what year will it be taxed ? A. Seattle in 2019. B. Portland in 2020. C. Seattle in 2020. D. Portland in 2019. #14 Answer (15). P Co. leases office space to S Co. How would the rent charged to S Co. be accounted for on the Consolidated Income Statement? A. P's rental income would be charged directly to contributed surplus. B. No adjustment is required as the rental income and rental expense offset each other. C. Both P's rental income and S's rental expense are eliminated from the Consolidated Income Statement. D. Ponly would record its pro-rata share of rental income. #15