Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the following account balances: Sales Cost of goods sold Operating expenses Investment income Dividends declared Akron Toledo $ 1,100,000 $ 600,000 588,888 400,000 488,888 220,000 Not given 88,888 30,000 Intra-entity sales of $320,000 occurred during 2017 and again in 2018. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2017, with $50,000 unsold on December 31, 2018. a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here? b. Prepare a consolidated Income statement for the year ending December 31, 2018. Required a Required B For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here? AKRON, INC. AND CONSOLIDATED SUBSIDIARY Income Statement Year Ending December 31, 2018 Sales S 1.380.000 Cost of goods sold (575,000) Gross profit 805.000 Operating expenses (635,000) S S 170,000