How do compute the income attributable to parent

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Carlos Bakery owns 60 percent of the stock of Zeus Products acquired several years ago at book value. On January 1, 2009, inventory reported by Carlos Bakery included 20,000 bags of flour purchased from Zeus Products at P90 per bag. By December 31, 2009, all these beginning inventory purchased from Zeus Products had been baked into products and sold to customers by Carlos Bakery. There were no transactions between Carlos Bakery and Zeus Products during 2009.

Problem 1: Both Carlos Bakery and Zeus Products price their sales at cost plus 50% mark-up for profit. Carlos Bakery reported income from its baking operations of P3,000,000 and Zeus Products reported net income of P2,500,000 for 2009. Compute the income attributable to parent.

A. P3,420,000

B. P4,860,000

C. P4,500,000

D. P5,580,000

Reference no: EM132918819

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