Consolidated Return Scenario: Company P Purchased an 80% Interest in Company

Consolidated Return Scenario: Company P purchased an 80% interest in Company S on January 1, 20X3, for $800,000. On the purchase date, Company S stockholders' equity was $800,000. Any excess of cost over book value was attributed to a patent with a 10-year remaining life. In 20X3, Company P reported internally generated net income before taxes of $150,000. Company S reported a net income before taxes of $70,000. The firms file a consolidated tax return at a 30% tax rate.
-Refer to the Consolidated Return scenario. The controlling share of consolidated net income is

A) $14,000
B) $12,000
C) $28,000
D) $36,000