1) On January 1, Year 2022, Patti Ltd. acquired 70% of Sammi Inc. when Sammis retained earnings were $1,000,000. There was no acquisition differential. Patti accounts for its investment under the cost method. Sammi sells inventory to Patti on a regular basis at a markup of 25% of selling price. The intercompany sales were $160,000 in Year 2022 and $190,000 in Year 2023. The total amount owing by Patti related to these intercompany sales was $60,000 at the end of Year 2022 and $50,000 at the end of Year 2023. On January 1, Year 2023, the inventory of Patti contained goods purchased from Sammi amounting to $70,000, while the December 31, Year 2023, inventory contained goods purchased from SAT amounting to $80,000. Both companies pay income tax at the rate of 30%. Selected account balances from the records of Patti and Sammi for the year ended December 31, Year 2023, were as follows (both companies have January to December fiscal years): Patti Sammi Inventory $530,000 $350,000 Accounts payable 700,000 420,000 Retained earnings, January 1, 2023 2,500,000 1,200,000 Sales 4,100,000 2,600,000 Cost of sales 3,200,000 1,800,000 Income tax expense 180,000 150,000

Required Determine the amount to report on the Year 2023 consolidated financial statements for the selected accounts noted above. Hint: you may find it helpful to prepare an inter-company inventory profit analysis and consolidation worksheet entries to guide your calculations.