On January $1,$ Year $2,$ P Ltd$.$ acquired $90\%$ of S Inc. when S$$s retained earnings were $$910,000.$ There was no acquisition differential. P accounts for its investment under the cost method. S sells inventory to P on a regular basis at a markup of $30\%$ of selling price. The inter$-$company sales were $$50,000$ in Year $2$ and $$80,000$ in Year $3.$ The total amount owing by P related to these inter$-$company sales was $$10,000$ at the end of Year $2$ and $$8,000$ at the end of Year $3.$ On January $1,$ Year $3,$ the inventory of P contained goods purchased from S amounting to $$10,000,$ while the December $31,$ Year $3,$ inventory contained goods purchased from S amounting to $$20,000.$ Both companies pay income tax at the rate of $40\%.$

Selected account balances from the records of P and S for the year ended December $31,$ Year $3,$ were as follows:

Account balances

P S

Inventory $$100,000$ $$310,000$

Account Payable $610,000330,000$

Retained earnings, beginning of year $2,410,0001,110,000$

Sales $4,010,0002,510,000$

Cost of sales $3,110,0001,710,000$

Income tax expense $90,00060,000$

Required:

Prepare the inter$-$company profit analysis for year $3.$

Show the consolidation worksheet entries to recognize and eliminate inter$-$company inventory profits you identified above in part $$a$$ for year $3.$

Calculate and report the amount to report on the Year $3$ consolidated financial statements for the selected accounts noted above.