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P bought 80% of the shares of S in 2018. Until the 2019 fiscal year, there were no intercompany transactions. During 2019, S sold $4,000
P bought 80% of the shares of S in 2018. Until the 2019 fiscal year, there were no intercompany transactions. During 2019, S sold $4,000 of widgets to P, of which $1,200 of widgets remained in Ps ending inventory. S earned a gross profit of 30% on the widgets. Both companies are taxed at 40%. What is the amount of after-tax inventory profit that must be held back from consolidated net income in 2019?
a- 380
b- 216
c-320
d-400
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