Pink Corporation Owns 80 Percent of Sink Company's Voting Shares

Multiple Choice

Pink Corporation owns 80 percent of Sink Company's voting shares. During 20X4, Pink produced 60,000 smart phones at a cost of $62 each and sold 45,000 smart phones to Sink for $93 each. Sink sold 26,000 of the smart phones to unaffiliated companies for $128 each prior to December 31, 20X4, and sold the remainder in early 20X5 to unaffiliated companies for $133 each. Both companies use the perpetual inventory systems.
-Based on the information given above,what amount of cost of goods must be eliminated from the consolidated income statement for 20X5?

A) $3,596,000
B) $3,379,000
C) $806,000
D) $589,000