Petronet sells merchandise to its 70-percent-owned subsidiary Sonata at a markup of 25 percent on cost. During 2017, Petronet charges Sonata $3,500,000 for merchandise sales. Sonata's 2017 beginning inventory contains $520,000 in merchandise purchased from Petronet. Sonata's 2017 ending inventory contains $460,000 in merchandise purchased from Petronet. Petronet uses the complete equity method to record its investment in Sonata. How are Petronet's 2017 equity in net income of Sonata and 2017 consolidated income to the noncontrolling interest affected by intercompany merchandise transactions?

Equity in net income

$12,000 increase

Noncontrolling interest in net income

$0

Equity in net income

$ 8,400 increase

Noncontrolling interest in net income

$3,600 increase

Equity in net income

$ 15,000 increase

Noncontrolling interest in net income

$ 0

Equity in net income

$ 10,500 increase

Noncontrolling interest in net income

$ 4,500 increase