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Karlow Corporation owns 70 percent of Draw Company's voting shares. During 20X3, Karlow produced 33,000 computer desks at a cost of $86 each and sold

Karlow Corporation owns 70 percent of Draw Company's voting shares. During 20X3, Karlow produced 33,000 computer desks at a cost of $86 each and sold 18,000 of themto Draw for $98 each. Draw sold 11,000 of the desks to unaffiliated companies for $134 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $144 each. Both companies use perpetual inventory systems.

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