P Company owns 100% of S Company which it acquired for $1,100,000 on 1/1/X1. At the time, S's equity included $500,000 capital stock and $500,000 Retained Earnings. An appraisal of S's assets on 1/5/X1 revealed the following information about mis-valued assets:

Fair ValueBook Value

Equipment (10-year life)100,00090,000

Inventory 110,00010,000

On the Consolidated Income Statement for P and S, how much consolidated income will be reported?

Select one:

a.$239,000

b.$249,000

c.$250,000

d.None of the Above