PAMPANGA CORPORATION acquired 75% of SULU COMPANY's outstanding voting shares for P1,650,000 on July 1, 2012. Selected transactions for the two affiliated companies from the date of acquisition to December 31, 2015, are as follows:

• SULU sold a piece of land to PAMPANGA on July 31, 2012, at a gain of P60,000. PAMPANGA sold the land to MARIKINA ENTERPRISES, an outsider to the group, for P305,500 on April 1, 2015.
• PAMPANGA sold special merchandise items to BULACAN, INCORPORATED, an unaffiliated company, on August 1, 2013, for P80,000 at a gross profit of P28,000. BULACAN sold the same merchandise after minor enhancements to SULU 2 months later at a gross profit of P30,500, sixty percent (60%) of which was still held by SULU at December 31, 2013.
• SULU sold goods to PAMPANGA on October 1, 2014, at a gross profit of P35,000; 80% of the merchandise was sold to outsiders by PAMPANGA during 2014.
• On July 1, 2014, PAMPANGA sold equipment to SULU for P320,000. The equipment is carried in PAMPANGA's records at P380,000. It had an estimated remaining life of 5 years from the date of the transfer.

 

The following additional information is relevant:

 

                                                     REPORTED NET INCOME      DECLARED CASH DIVIDEND

 

2014            2015                        2014               2015

PAMPANGA CORPORATION P620,000     P750,000          P380,000            P420,000

BULACAN, INCORPORATED 250,000        300,000            120,000           100,000

SULU COMPANY 350,000           420,000            80,000           100,000

 

The consolidated net income to be reported for the year 2014 will be

a)951,000

b)1,150,000

c)957,000

d)1,157,000

The 2014 consolidated net income attributable to the shareholders of PAMPANGA is

a)857,750

b)856,250

c)871,250

d)875,750

The consolidated net income to be reported in 2015 will be

a)1,150,000

b)951,000

c)1,157,000

d)957,000