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What adjustment will be made to consolidated net income

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Reference no: EM132742996

Question - During 2019, Y Company a 90% owned subsidiary sold inventory to its parent, X Company, for $1,000,000 at a 25% mark-up on cost. 30% of this inventory remained in X's inventory at December 31st. 2019. Both companies have a tax rate of 40% and a December 31st. year end. What adjustment will be made to consolidated net income in 2019?

a. An addition of $60,000

b. An addition of $36,000

c. A deduction $60,000

d. A deduction of $36,000.

Reference no: EM132742996

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