Working backwards from data which has eliminated intercompany transactions.

(Adapted from a problem by S. A. Zeff.) Alpha owns 100 percent of Omega and consolidates Omega in an entity called Alpha/Omega. Beginning in Year 2. Alpha sold merchandise to Omega at a price 50 percent larger than Alpha's costs. Omega sold some, but not all. o( these goods to customers at a further markup. Excerpts from the single-company statements of Alpha and Omega and from the consolidated financial statements of Alpha/Omega appear below.

Single-Company Statements Consolidated Financial Alpha Omega Statements Sales Revenue $450,000 $250,000 $620,000 Cost of Goods Sold 300,000 210,000 430,000 Merchandise Inventory 60,000 50,000 100,000

a. What was the total sales price at which Alpha sold goods to Omega during Year 2?

b. What was Omega's cost of the goods it had purchased from Alpha but has not yet sold by the end of Year 2? What was Alpha's cost of those goods? Which of those two numbers appears in the total Merchandise Inventory on the consolidated balance sheet ?