What is pews income from sordid

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Problem

Pew Corporation acquired 80% ownership of Sordid Incorporated, at a time when Pew's investment cost was equal to 80% of Sordid's book value. At the time of acquisition, the book values and fair values of Sordid's assets and liabilities were equal. Pew uses the equity method. During 2014, Pew sold goods to Sordid for $160,000 making a gross profit percentage of 20%. Half of these goods remained unsold in Sordid's inventory at the end of the year. Get the instant assignment help. Income statement information for Pew and Sordid for 2014 were as follows:

                                   Pew                Sordid
Sales Revenue               $800,000       $300,000
Cost of Goods Sold        500,000        160,000
Operating Expenses       200,000        80,000
Separate incomes          $100,000       $60,000

What is Pew's income from Sordid for 2014?

Reference no: EM133921821

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