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Benedict Company is wholly owned by Arlington. Benedict's net income in 2020 and 2021 was $9,000 and $10,000 respectively. Arlington sells all of its
Benedict Company is wholly owned by Arlington. Benedict's net income in 2020 and 2021 was $9,000 and $10,000 respectively. Arlington sells all of its output to Benedict at 150% of Arlington's cost to produce. During 2020 and 2021, Arlington's sales to Benedict were $7,000 and $5,000, respectively. Benedict's ending inventory at December 31, 2020 included $3000 of the merchandise acquired from Arlington and its December 31, 2021 inventory included $1,500 of merchandise acquired from Arlington. Benedict sold all of the inventory on hand at the end of 2020 in 2021. Required: Calculate Arlington's share of Benedict's net income at December 31, 2021. Note: Arlington owns 100% of Benedict. (Show your calculations)
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