Pants Company and Shirt Company both produce and purchase fabric for resale each period and frequently sell to each other. Since Pants Company holds 80 percent ownership of Shirt Company, Pants' controller compiled the following information with regard to intercompany transactions between the two companies in 20X7 and 20X8:

		Percent Resold to Nonaffiliate in
Year	Produced by	Sold to	20X7		20X8		Cost to Produce			Sale Price to Affiliate
20X7	Pants Co.	Shirt Co.	70	%	30	%	$	170,000		$	200,000
20X7	Shirt Co.	Pants Co.	50	%	30	%		50,000			80,000
20X8	Pants Co.	Shirt Co.			75	%		35,000			52,000
20X8	Shirt Co.	Pants Co.			40	%		230,000			280,000

a. Give the consolidating entries required at December 31, 20X8, to eliminate the effects of the inventory transfers in preparing a full set of consolidated financial statements.

b. Compute the amount of cost of goods sold to be reported in the consolidated income statement for 20X8.