Parent owns an 80% interest in Sub and at 12/31/11, Parent's investment in Sub on an equity basis was equal to 80% of Sub's stockholders' equity. During 2012, Sub sells inventory to Parent for $200,000, at a gross profit to Sub of $40,000. At 12/31/12, half of this merchandise is still included in parent's inventory. Separate incomes for Parent and Sub for 2012 are as follows: