Baelfire Corporation owns an 80% interest in Sheriff Corporation acquired several years ago. Sheriff regularly sells merchandise to its parent at 125% of Sheriff's cost. Gross profit data of Baelfire...

Baelfire Corporation

A. 520,000 and 65,000 respectively
B. 65,000 and 81,250 respectively
C. 13,000 and 16,250 respectively
D. 30,400 and 13,000 respectively

Extracted text: Baelfire Corporation owns an 80% interest in Sheriff Corporation acquired several years ago. Sheriff regularly sells merchandise to its parent at 125% of Sheriff's cost. Gross profit data of Baelfire and Sheriff for the year 2020 are as follows: Baelfire P650,000 Sheriff Sales . P520,000 Cost of goods sold Gross profit . 520,000 416,000 P 130,000 P104,000 During 2020, Baelfire purchases inventory items from Sheriff at a transfer price of P260,000. Baelfire's December 31, 2019 and 2020 inventories included goods acquired from Sheriff of P65,000 and P81,250, respectively. The Unrealized profits in the year-end 2019 and 2020 inventories were: