Q.39 P Corporation owns a 80% interest in S Company, acquired several years ago at a cost equal to book value and fair value. S sells merchandise to P for loss the first time in 2014, and some is unsold at December 31, 2014. In computing income from the investee for 2014 under the equity method, P uses which equation?

Select one: a. 80% of S income plus 100% of the unrealized loss in P ending inventory b. 80% of S income less 80% of the unrealized loss in P ending inventory c. 80% of S income plus 80% of the unrealized loss in P ending inventory d. 80% of S income less 100% of the unrealized loss in P ending inventory