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 2021, the companies had the following account balances:

LO 5-3, 5-4, 5-5

Akron Toledo

Sales $1,100,000 $600,000

Cost of goods sold 500,000 400,000

Operating expenses 400,000 220,000

Investment income Not given 0

Dividends declared 80,000 30,000

Intra-entity sales of $320,000 occurred during 2020 and again in 2021. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2020, with $50,000 unsold on December 31, 2021.

1. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?
2. Prepare a consolidated income statement for the year ending December 31, 2021.