Acquired Partially Owned Subsidiary with Intercompany Transactions:

January 2, 2019, Paris, Inc. acquired 80% of Sydney Company's voting stock for $640,000. The fair value of the other 20% of Sydney's stock was $160,000 at that time. At the acquisition date, each of Sidney's identifiable assets and liabilities had fair value equal to its carrying value. Paris uses the equity method to record its investment in Sydney.

During 2019, Sydney sold inventory costing $90,000 to Paris for $150,000. Of this inventory, Paris still held $60,000 at the end of 2019. Paris sold this ending inventory to a customer during 2020. In 2020, Sydney sold inventory costing $110,000 to Paris for $200,000. Paris still held $60,000 of this inventory at 12/31/20. Sydney reported $85,000 of net income and $50,000 of dividends declared for the year 2020. Selected figures from the 12/31/20 separate financial statements of the two firms follow: (All credit balances are indicated by parentheses.)

Sales:

Paris: $(650,000)

Sydney: $(559,000)

Inventory:

Paris: $240,000

Sydney: $120,000

1. What is the amount of Sydney's unrealized gross profit from its inventory sales to Paris at the end of 2019 and 2020, respectively?

2019: ________ 2020: ________

2. Provide all consolidation entries that will be needed in the 2020 consolidation worksheet in order to eliminate the effects of the two intercompany inventory sales. (Do not include any entry that does not belong to the 2020 worksheet.)

3. Determine the consolidated amount of each of the following items: a. Sales, 2020: ______

b. Inventory, at 12/31/20: ________

c. NCI in net income, 2020: _________

4. If both intercompany inventory sales were downstream (i.e., from Paris to Sydney) rather than upstream, how much would be NCI in net income for 2020?