_____ (Module 1) in 2005, Sandex, a 100%-Owned Subsidiary of Pandex

Multiple Choice

_____ (Module 1) In 2005, Sandex, a 100%-owned subsidiary of Pandex, sold inventory costing $75,000 to Pandex for $120,000. At 12/31/05, Pandex reported $40,000 of this inventory in its balance sheet. For 2005, Sandex reported net income of $500,000, which includes the $45,000 of intercompany profit. In applying the equity method at 12/31/05, Pandex records which amount in its Equity in Net Income of Subsidiary account?

A) $380,000
B) $455,000
C) $460,000
D) $485,000
E) $500,000