From advanced accounting, 13th edition, by Beams.

Use the following information to answer questions 30-34 Eagle owns 80% of Flyway's common stock that was purchased at its underlying book value. The two companies report the following information for 2004 and 2005. During 2004, one company sold inventory to the other company for $50,000 which cost the transferor $40,000, As of the end of 2004, 30% of the inventory was unsold. In 2005, the remaining inventory was resold outside the consolidated entity $ 2004 Selected Data: Sales Revenue Cost of Goods Sold Other Expenses Net Income $ Eagle 600,000 320,000 100,000 180,000 Flyway 320,000 155,000 89.000 76,000 $ Dividends Paid 19.000 0 2005 Selected Data: Sales Revenue Cost of Goods Sold Other Expenses Net Income $ $ $ Eagle 580,000 300,000 130.000 130.000 Flyway 445.000 180,000 171.000 94.000 $ Dividends Paid 16,000 5,000 If the sale referred to above was a downstream sale, the total sales revenue reported in the consolidated income statement for 2004 would be? a $870,000 b. $880,000 c. $920,000 d. $970,000 If the sale referred to above was a downstream sale, by what amount must Inventory be reduced to reflect the correct balance as of the end of 2004? $3,000 b. $10,000 c. $14,000 d. $20,000 7 For 2004, controlling share of consolidated net income is what amount if the intercompany sale was downstream? # $256,000 b. $237,800 c. $238,400 d $253,000 If the intercompany sale mentioned above was an upstream sale, what will be the reported amount of total sales revenue for 2005? a $1,025.000 b. $1.900,000 $1,950,000 d $2.000.000 If the intercompany sale was an upstream sale, the total amount of consolidated cost of goods sold for 2005 will be? a $300,000 b. $430,000 c. $470.000 d. $477,000