Pisa Company acquired 75% of Siena Company on January 1, 2003 at book value. During 2003, Siena purchased inventory for $35,000 and sold it to Pisa for $50,000. Of this amount, Pisa reported $20,000 in ending inventory in 2003 and later sold it in 2004. In 2004, Pisa sold inventory it had purchased for $40,000 to Siena for $60,000. Siena sold $45,000 of this inventory in 2004. In 2004, Pisa reported stand-alone income of $550,000 and Siena reported total net income of $118,000.

a. Prepare the consolidation entries that related to intercompany sale of inventory for 2003.

b. Prepare the consolidation entries that related to intercompany sale of inventory for 2004.

c. Calculate consolidated net income AND income assigned to controlling shareholders in 2004.