Pot Co. holds 90% of the common stock of Skillet Co. During 2009, 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. Also during 2009, Pot sold merchandise to Skillet for $140,000. The subsidiary still possesses 40% of this inventory at the end of 2009. Pot had established the transfer price based on its normal markup.