Phelps Co. uses the sophisticated equity method to account for the 80% investment in its...
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Accounting
Phelps Co. uses the sophisticated equity method to account for the 80% investment in its subsidiary Shore Corp. At the time of the acquisition, the fair values of the net asset required approximated their book values. During the year, Shore sells inventory to Phelps. Based upon the following information, what is consolidated net income?
| Phelps internally generated income: | $250,000 |
| Shore internally generated income: | $ 50,000 |
| Intercompany profit in beginning inventory purchased from Shore: | $ 10,000 |
| Intercompany profit in ending inventory purchased from Shore: | $ 15,000 |
| a. | $300,000 |
| b. | $295,000 |
| c. | $286,000 |
| d. | $305,000 |
Show your work please
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