Holiday Bakery owns 60 percent of the stock of Farmco Products Company. During 20X8. Farmco Products produced 100.000 bags of flour, which it sold to Holiday Bakery for \(\$ 900.000\). On December 31. 20X8. Holiday Bakery had 20.000 bags of flour purchased from Farmco Products on hand. Farmco prices its sales at cost plus 50 percent of cost for profit. Holiday Bakery, which purchased all its flour from Farmco Products in 20X8, had no inventory on hand on January 1. 20X8.

Holiday Bakery reported income from its baking operations of \(\$ 400.000\), and Farmco Products reported net income of \(\$ 150.000\) for \(20 \mathrm{X} 8\).

\section*{Required}

a. Compute the amount reported as cost of goods sold in the \(20 \mathrm{X} 8\) consolidated income statement.

b. Give the workpaper eliminating entry or entries required to remove the effects of the intercompany sale in preparing consolidated statements at the end of 20X8.

c. Compute the amount reported as consolidated net income for 20X8