Corporation acquires all the stock of S Corporation on October 15 of the current year, which is the 288th day of the year (and not a leap year).

Neither corporation is affiliated with another corporation prior to the acquisition. P and S use the accrual method of accounting, and each uses the calendar year as its taxable year. P's and S's income for the current year, which includes no extraordinary items, are $876,000 and $292,000, respectively. For each of the following circumstances, what tax returns must the corporations file for the current year, and what amount of income must each of those returns include?

1. P and S elect to file a consolidated tax return and also elect to ratably allocate the entering subsidiary's income.
2. P and S do not elect to file a consolidated tax return.