On January 1, Year 2, PAT Ltd. acquired 90% of SAT Inc. when SATs retained earnings were $1,300,000. There was no acquisition differential. PAT accounts for its investment under the cost method. SAT sells inventory to PAT on a regular basis at a markup of 30% of selling price. The intercompany sales were $190,000 in Year 2 and $220,000 in Year 3. The total amount owing by PAT related to these intercompany sales was $90,000 at the end of Year 2 and $80,000 at the end of Year 3. On January 1, Year 3, the inventory of PAT contained goods purchased from SAT amounting to $100,000, while the December 31, Year 3, inventory contained goods purchased from SAT amounting to $110,000. Both companies pay income tax at the rate of 40%.

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

	PAT		SAT
Inventory	$	540,000		$	700,000
Accounts payable		1,000,000			720,000
Retained earnings, beginning of year		2,800,000			1,500,000
Sales		4,400,000			2,900,000
Cost of sales		3,500,000			2,100,000
Income tax expense		180,000			50,000

Required:

(a) Determine the amount to report on the Year 3 consolidated financial statements for the selected accounts noted above. (Input all amounts as positive values. Omit $ sign in your response.)

Inventory $

Accounts payable

Retained earnings, beginning of year

Sales

Sales Cost of sales

Income tax expense