Peanut Butter Company routinely receives goods from its 80%-owned subsidiary, Sinnamon Corporation. In 20X4, Sinnamon sold merchandise that cost $70,000 to Peanut Butter for $90,000. Half of this merchandise remained in Peanut Butter's December 31, 20X4 inventory. This inventory was sold in 20X5. During 20X5, Sinnamon sold merchandise that cost $150,000 to Peanut Butter for $210,000. One-third of the 20X5 merchandise inventory remained in Peanut Butter's December 31, 20X5 inventory.

Selected income statement information for the two affiliates for the year 20X5 was as follows:

Peanut Butter Sinnamon

Sales Revenue $500,000 $400,000

Cost of Goods Sold 350,000 260,000

Other Expenses 50,000 70,000

Consolidated cost of goods sold for Peanut Butter and Sinnamon for 20X5 was:

Select one:

a.

$410,000

b.

$390,000

c.

$380,000

d.

$420,000

e.

$610,000

Separate Net Incomes $100,000 $70,000