Use the following to answer questions 2 & 3:

P Company regularly sells merchandise to its 80%-owned subsidiary, S Corporation. In 2013, P sold merchandise that cost $280,000 to S for $340,000. Half of this merchandise remained in S's December 31, 2013 inventory. During 2014, P sold merchandise that cost $395,000 to S for $480,000. Forty percent of this merchandise inventory remained in S's December 31, 2014 inventory. Selected income statement information for the two affiliates for the year 2014 is as follows:

P

S

Sales Revenue	$2,250,000	$1,125,000
Cost of Goods Sold	1,800,000	937,500
Gross profit	$450,000	$187,500

Reference: Ref 6-1

Consolidated cost of goods sold for P Company and Subsidiary for 2014 are:

Select one:

A. $2,276,700.

B. $2,261,500.

C. $2,260,500.

D. $2,253,500.

Question 3

Consolidated sales revenue for P and Subsidiary for 2014 are:

Select one:

A. $2,907,000.

B. $3,375,000.

C. $3,855,000.

D. $2,895,000.

Question 4

Use the following to answer questions 4 & 5:

P Company owns an 80% interest in S Company. During 2014, S sells merchandise to P for $200,000 at a profit of $40,000. On December 31, 2014, 50% of this merchandise is included in P's inventory. Income statements for P and S are summarized below:

P

S

Sales	$1,200,000	$600,000
Cost of Sales	(600,000)	(400,000)
Operating Expenses	(300,000)	( 80,000)
Net Income (2014)	$300,000	$120,000

Reference: Ref 6-2

Controlling interest in consolidated net income for 2014 is:

Select one:

A. $420,000.

B. $380,000.

C. $300,000.

D. $396,000.

Question 5

Noncontrolling interest in income for 2014 is:

Select one:

A. $20,000.

B. $24,000.

C. $19,200.

D. $4,000.