Postage Corporation Receives Management Consulting Services from Its 92 Percent-Owned

Multiple Choice

Postage Corporation receives management consulting services from its 92 percent-owned subsidiary,Stamp Inc.During 20X7,Postage paid Stamp $125,432 for its services.For the year 20X8,Stamp billed Postage $140,000 for such services and collected all but $7,900 by year-end.Stamp's labor cost and other associated costs for the employees providing services to Postage totaled $86,000 in 20X7 and $121,000 in 20X8.Postage reported $2,567,000 of income from its own separate operations for 20X8,and Stamp reported net income of $695,000.
-Based on the preceding information,what amount of consolidated net income should be reported in 20X8?

A) $3,262,000
B) $4,050,000
C) $3,254,100
D) $3,122,000