Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2014, when Scenic had a net book value of $650,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $8,000 per year.

Placid Lakes 2015 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $550,000. Scenic reported net income of $360,000. Placid Lake declared $180,000 in dividends during this period; Scenic paid $65,000. At the end of 2015, selected figures from the two companies balance sheets were as follows:

Placid Lake Scenic

Inventory $ 390,000 $ 115,000

Land 850,000 450,000

Equipment (net) 650,000 550,000

During 2014, intra-entity sales of $200,000 (original cost of $92,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of 2014. In 2015, $340,000 in intra-entity sales were made with an original cost of $84,000. Of this merchandise, 20 percent had not been resold to outside parties by the end of the year.

Each of the following questions should be considered as an independent situation for the year 2015.

1. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest? What is the answer for the controlling interest? What is the answer for the noncontrolling interest?

2. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest? What is the answer for the controlling interest? What is the answer for the noncontrolling interest?

3. What is the consolidated balance in the ending Inventory account?