REFERENCE: Ref.05_01 Pot Co.holds 90% of the Common Stock of Skillet Co.During

Multiple Choice

REFERENCE: Ref.05_01
Pot Co.holds 90% of the common stock of Skillet Co.During 2009,Pot reported sales of $1,120,000 and cost of goods sold of $840,000.For this same period,Skillet had sales of $420,000 and cost of goods sold of $252,000.Also during 2009,Pot sold merchandise to Skillet for $140,000.The subsidiary still possesses 40% of this inventory at the end of 2009.Pot had established the transfer price based on its normal markup.
-Assuming that the transfers were from Skillet Co.to Pot Co. ,what are consolidated sales and cost of goods sold?

A) $1,400,000 and $952,000.
B) $1,400,000 and $966,000.
C) $1,540,000 and $1,078,000.
D) $1,400,000 and $974,400.
E) $1,540,000 and $1,092,000.