q.28

P CO owns a 90% interest in S Co, purchased at a time when the book values of S recorded assets and liabilities were equal to fair values. During 2014, S sold merchandise to P cost 32,000 for $40,000 . At December 31, 2014, 75% of this merchandise is still in P inventory. Separate incomes for P&S are summarized as follows:

P S

Sales $900,000 $200,000

Cost of sales 400,000 100,000

Gross profit 500,000 100,000

Operating expenses 200,000 80,000

Separate income $300,000 $ 20,000 What is amount of total sales in consolidated income statement?

Select one:

a. 1,066,000

b. 1,060,000

c. 1,068,000

d. 1,100,000