_____ in 2006, Pulco Acquired Inventory from Its 75%-Owned Subsidiary

Multiple Choice

_____ In 2006, Pulco acquired inventory from its 75%-owned subsidiary, Sulco, for $250,000. Sulco's cost was $200,000. At 12/31/06, Pulco reported $40,000 of intercompany-acquired inventory in its balance sheet. The amount by which the 2006 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 the above.