Determining intercompany transaction

Reference no: EM13146232

In 2009, Pulco acquired inventory from its 75%-owned subsidiary, Sulco, for $250,000. Sulco's cost was $200,000. At 12/31/09, Pulco reported $40,000 of intercompany-acquired inventory in its balance sheet. The amount by which the 2009 consolidated net income that accrues to the controlling interest will be lower as a result of this being an intercompany transaction is:

a. $6,000.

b. $8,000.

c. $30,000.

d. $40,000.

e. none of these choices.

Reference no: EM13146232

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