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During 2020 PLANK, Inc. sold inventory costing $400,000 to its 34.0%-owned investee Sentry at a 40.0% markup. At the end of the year Sentry had
During 2020 PLANK, Inc. sold inventory costing $400,000 to its 34.0%-owned investee Sentry at a 40.0% markup. At the end of the year Sentry had sold $392,000 of this inventory to unrelated businesses. The amount of pre-tax income that PLANK should recognize in connection with this transaction is a) $143,680. b) $105,600. c) $112,000. d) $141,000.
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