Select the correct answer for each of the following questions.
Lorn Corporation purchased inventory from Dresser Corporation for \(\$ 120,060\) on September 20. 20X1, and resold 80 percent of the inventory to unaffiliated companies prior to December 31 . 20X1, for \(\$ 140,000\). Dresser Corporation produced the inventory sold to Lorn for \(\$ 75,000\). Lorn owns 70 percent of the voting common stock of Dresser. The companies had no other transactions during \(20 \mathrm{X} 1\).
1. What amount of sales will be reported in the \(20 \mathrm{X} 1\) consolidated income statement?

a. \(\$ 98,000\).

b. \(\$ 120,000\).

c. \(\$ 140.000\).

d. \(\$ 260,000\).
2. What amount of cost of goods sold will be reported in the 20X1 consolidated income statement?

a. \(\$ 60,000\).

b. \(\$ 75,000\).

c. \(\$ 96.000\).

d. \(\$ 120,000\).

e. \(\$ 171,000\).
3. What amount of consolidated net income will be reported for 20X1?

a. \(\$ 20.000\).

b. \(\$ 30,800\).

c. \(\$ 44.000\).

d. \(\$ 45.000\).

e. \(\$ 69.200\).

f. \(\$ 80.000\).

4. What inventory balance will be reported by the consolidated entity on December 31, 20X1?

a. \(\$ 15,000\).

b. \(\$ 16.800\).

c. \(\$ 24,000\).

d. \(\$ 39,000\).