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Proud Inc. and Slink Inc. both produce and purchase equipment for resale each period and frequently sell to each other. Proud owns 60% of Slink.

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Proud Inc. and Slink Inc. both produce and purchase equipment for resale each period and frequently sell to each other. Proud owns 60% of Slink. Following is information regarding intercompany equipment sales between Proud and Slink in 2019 and 2020. In 2019, Proud produced equipment for $200,000 and sold it to Slink for $300,000. Slink resold 60% and 40% of the equipment to nonaffiliated customers in 2019 and 2020, respectively. In 2019, Slink produced equipment for $140,000 and sold it to Proud for $200,000. Proud resold 30% and 50% of the equipment to nonaffiliated customers in 2019 and 2020, respectively. In 2020, Proud produced equipment for $80,000 and sold it to Slink for $120,000. Slink resold 90% of the equipment to nonaffiliated customers in 2020. In 2020, Slink produced equipment for $400,000 and sold it to Proud for $480,000. Proud resold 25% of the equipment to nonaffiliated customers in 2020. Identify the following statements that are TRUE regarding the consolidation entries required at December 31, 2020, to eliminate the effects of the 2019 and 2020 inventory transfers in preparing consolidated financial statements. The consolidation entry for 2019 upstream transfer includes a debit to Investment in Slink of $30,000, a debit to NCI in NA of Slink of $12,000, a credit to Inventory of $30,000, and a credit to Cost of Goods Sold of $12,000. | The consolidation entry for the 2019 downstream transfer includes a debit to Investment in Slink of $40,000 and a credit to Cost of Goods Sold of $40,000. The consolidation entry for the 2020 upstream transfer includes a debit to Sales of $480,000, a credit to Cost of Goods Sold of $420,000, and a credit to Inventory of $60,000 The consolidation entry for the 2020 downstream transfer includes a debit to Sales of $120,000, a credit to Cost of Goods Sold of $116,000, and a credit to Inventory of $4,000

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