s Company, an 80% owned subsidiary of P Company, purchased land from P on 03/01/Y1, for $75,000. The land originally cost P $60,000. S reported net income of $125,000 and $140,000 for Y1 & Y2, respectively. P uses the equity method to account for its investment. On a consolidation worksheet, having used the equity method, what adjustment would be made for Y2 regarding the land transfer? Debit retained earnings for $50,000 Credit retained earnings for $50,000 Credit retained earnings for $15,000 Debit investment in S for $15,000 Debit retained earnings for $15,000 Question 12 (3 points) Powns 80% of the common stock of S. In Year 1, P reports sales of $10,000,000 and cost of goods sold of $7.500.000. For the same period, S has sales of $200,000 and cost of goods sold of $160,000. During the year, P sold merchandise to S for $60,000 at a price based on the normal markup. At the end of Y1, S still possesses 30% of this inventory. Compute consolidated cost of goods sold. $7,615,000 $7,500,000 $7,660,000 $7,600,000 $7,604,500