On January 1, 2010, Apple Company acquired 75% of the outstanding common stock of Orange Company for $600,000 in cash. On the date of the acquisition, the fair value of the 25% noncontrolling interest in the Orange Company was $200,000. The book value of Orange Companys net assets on January 1, 2010, was $500,000 and consisted of common stock of $150,000 and retained earnings of $350,000.

Some of Orange Company assets were internally developed and were not reported on its books or had fair value that differed from it carrying value on the date of the acquisition as follows:

	Book Values	Fair Values
Patented Technologies (10 years of remaining life)	50,000	150,000
Customer List (5 years of remaining life)	-0-	75,000

Any remaining excess acquisition-date fair value was assigned to goodwill. Since acquisition, Apple has not had any goodwill impairments.

Intra-entity inventory sales between the two companies have been made as follows:

Year	Cost to Apple	Transfer Price to Orange	Ending Balance(at transfer price)
2010	130,000	180,000	45,000
2011	150,000	210,000	70,000

Presented below are the financial statements for these two companies as of December 31, 2011, prepared from their separately maintained accounting systems. Credit balances are indicated by parentheses.

The amount on the Sales account that should be reported on the Consolidated Income Statement for the year ended on December 31, 2011 should be:

		(1,220,000)
		(1,430,000)
		(1,310,000)
		(1,100,000)
		None of the answers is correct