Question
P CO owns a 90% interest in S Co, purchased at a time when the book values of S recorded assets and liabilities were equal
P CO owns a 90% interest in S Co, purchased at a time when the book values of S recorded assets and liabilities were equal to fair values. During 2014, S sold merchandise to P cost 32,000 for $40,000 . At December 31, 2014, 75% of this merchandise is still in P inventory. Separate incomes for P&S are summarized as follows: S Sales $900,000o $200,00o Cost of sales 400,000 100,00O 500,000 Gross profit 100,00o Operating expenses 200,000 80,000 $300,00o What is amount of total cost Separate income $ 20,000 of goods sold in consolidated income statement?
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