During September of Year 9, Par sold $200,000 worth of inventory to Sub, 35% of which was sold to outsiders during Year 9. Par's cost was $140,000. During November of Year 10, Sub sold inventory to Par for $180,000. 25% of this inventory was resold to an outsider during Year 10. Sub's sales are priced with a 40% profit margin. During June of Year 10, Sub sold a plot of Land to Par for $120,000. The land was recorded at cost of $90,000 on Sub's book prior to the sale. Par has not yet sold the land. The effective tax rate for both companies is 30%.

MCQ1. Par COGS was $910,000 and Sub COGS was $775,000. How much is the total of COGS line on the consolidated income statement in Year 10?

a. $1,520,000

b. $1,670,600

c. $1,685,000

d. $1,700,000

e. $1,850,000

MCQ2. Which of the following would be the adjustment in the calculation of cons NI relating to land?

a. Add $21,000 to sub's net income

b. Subtract $21,000 from the parent's net income

c. Subtract $21,000 from the sub's net income

d. No adjustment

e. Subtract $30,000 from sub's net income

MCQ3. Par income tax expense was $110,000 and Sub income tax expense was $115,000. How much is the total of income tax expense line on the consolidated income statement in Year 10?

a. $211,500

b. $220,500

c. $225,000

d. $243,900

e. $238,500