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F 5-4 Compuiatlons (upstream aml downshaam sales) Comparative income statements of Son Corporation for the calendar years 2016, 2017, and 2018 are as follows (in
F 5-4 Compuiatlons (upstream aml downshaam sales) Comparative income statements of Son Corporation for the calendar years 2016, 2017, and 2018 are as follows (in thousands): 2016 2017 2018 Sales $48,000 $51,000 $5 7,000 Cost of sales 25,200 26,400 30,000 Gross prot 22,800 24,600 27,000 Operating expenses 18,000 19,200 22,800 Net income 35 4,800 $ 5,400 $ 4,200 ADDITIONAL INFORMATION 1. Son was a 75 percentowned subsidiary of Pop Corporation throughout ne 20162018 period. Pop's separate income (excludes income from Son) was $21,600,000, $20,400,000, and $24,000,000 in 2016, 2017, and 2018, respectively. Pop acquired its interest in Son at its underlying book value, which was equal to fair value on July 1, 2015. 2. Pop sold inventory items to Son during 2016 at a gross prot to Pop of $2,400,000. Half the mer- chandise remained in Son's inventory at December 31, 2016. Total sales by Pop to Son in 2016 were $6,000,000. The remaining merchandise was sold by Son in 2017
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