P Company regularly sells merchandise to its 80% - owned subsidiary, S Corporation. In 2016, P sold merchandise that cost $240,000 to S for $300,000. Half of this merchandise remained in S's December 31, 2016 inventory. During the 2017, P sold merchandise that cost $375,000 to S for $468,000. Forty percent of this merchandise inventory remained in S's December 31, 2017 inventory, Selected income statement information for the two affiliates for the year 2017 is as follows