Petronet sells merchandise to its 80-percent-owned subsidiary Sonata at a markup of 20 percent on cost. During 2023, Petronet charges Sonata $4,000,000 for merchandise sales. Sonatas 2023 beginning inventory contains $540,000 in merchandise purchased from Petronet. Sonatas 2023 ending inventory contains $480,000 in merchandise purchased from Petronet. Petronet uses the complete equity method to record its investment in Sonata. How are Petronets 2023 equity in net income of Sonata and 2023 consolidated income to the noncontrolling interest affected by intercompany merchandise transactions?

Equity in net income

$10,000 increase

Noncontrolling interestin net income

$0

Equity in net income

$ 8,000 increase

Noncontrolling interestin net income

$ 2,000 increase

Equity in net income

$ 12,000 increase

Noncontrolling interestin net income

$ 0

Equity in net income

$ 9,600 increase

Noncontrolling interestin net income

$ 2,400