The price of high-quality burnwhistles fluctuates substantially from month to month. As a result, it is not uncommon for a company that deals in burnwhistles to report a substantial gain in one period, followed by a substantial loss in the following period. The price of burnwhistles was relatively high during the first three months of 20X8, declined substantially for the next four months, and then recovered nicely by year-end. On February 6, 20X8. Trent Company purchased burnwhistles for \(\$ 400,000\) and sold them to Gord Corporation on July 10, 20X8, for \(\$ 300.000\). Gord held its purchase for several months before selling 60 percent to nonaffiliates for \(\$ 360,000\) in late November. The remaining units were held at year-end and are expected to be sold in early \(20 \mathrm{X} 9\) for approximately \(\$ 240,000\). Gord Corporation owns 75 percent of the stock of Trent Company.

\section*{Required}

a. Give the journal entries recorded by Trent and Gord during 20X8 related to the initial purchase, intercorporate sale, and resale of inventory.

b. What amount should be reported as cost of goods sold in the 20X8 consolidated income statement?

c. If Gord reported operating income of \(\$ 230,000\) and Trent reported net income of \(\$ 80,000\), what amount of consolidated net income should be reported by Gord for 20X8?

d. Give the workpaper eliminating entry or entries needed in preparing consolidated financial statements for \(20 \mathrm{X} 8\) to remove all effects of the intercompany transfer.