Pot Co. holds 90% of the common stock of Skillet Co. During 2018, 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.Included in the amounts for Skillet's sales were intra-entity gross profits related to Skillet's intra-entity transfer of merchandise to Pot for $140,000. There were no intra-entity transfers from Pot to Skillet. Intra-entity transfers had the same markup as sales to outsiders.  Pot still had 40% of the intra-entity gross profit remaining in ending inventory at the end of 2018. What are consolidated sales and cost of goods sold for 2018?

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


Answer: B

Business

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