Pam Company owns controlling interests in Sun and Toy Corporations, having acquired an 80 percent interest in Sun in 2016, and a 90 percent interest in Toy on January 1, 2017. Pam's investments in Sun and Toy were at book value equal to fair value. Inventories of the affiliated companies at December 31, 2017, and December 31, 2018, were as follows:
....................................December 31, 2017............. December 31, 2018
Pam inventories ..............................$120,000......................... $108,000
Sun inventories.................................. 77,500............................ 62,500
Toy inventories ..................................48,000............................ 72,000
Pam sells to Sun at a 25 percent markup based on cost, and Toy sells to Pam at a 20 percent markup based on cost. Pam's beginning and ending inventories for 2018 consisted of 40 percent and 50 percent, respectively, of goods acquired from Toy. All of Sun's inventories consisted of merchandise acquired from Pam.
REQUIRED:
1. Calculate the inventory that should appear in the December 31, 2017, consolidated balance sheet.
2. Calculate the inventory that should appear in the December 31, 2018, consolidated balance sheet.