Puzzle Corporation purchased 75 percent of Sunday Company's common stock at underlying book value on January 1, 20X3. At that date, the fair value of the noncontrolling interest was equal to 25 percent of Sunday's book value. Trial balances for Puzzle and Sunday on December 31, 20X7, are as follows: 20X7 Trial Balance Data Puzzle Corporation Credit Sunday Company Debit $ 54,800 Credit Item Cash Debit $ 43,900 Accounts Receivable 113,000 Other Receivables 45,000 Inventory 183,000 108,000 30,000 121,000 Land 99,000 Buildings & Equipment 513,000 49,000 254,000 Investment in Sunday Company: Bonds 78,800 Stock 192.090 Cost of Goods Sold 614,000 230,000 Depreciation Expense 45,000 15,000 Interest & Other Expenses 35,000 22,000 Dividends Declared Accumulated Depreciation Accounts Payable Other Payables Bonds Payable Bond Premium Common Stock Additional Paid-In Capital Retained Earnings 50,000 24,000 $ 137,000 $ 62,000 198,000 71,000 34,000 250,000 14,000 200,000 250,000 4,800 50,000 39,000 265,180 170,000 Sales 766,000 329,000 Interest & Other 19,000 7,000 Income Income from Sunday Company Total $2,011,790 53,610 $2,011,790 $907,800 $907,800 During 20X7, Puzzle resold inventory purchased from Sunday in 20X6. It had cost Sunday $47,000 to produce the inventory, and Puzzle had purchased it for $62,000. In 20X7, Puzzle had purchased inventory for $43,000 and sold it to Sunday for $63,000. At December 31, 20X7, Sunday continued to hold $28,350 of the inventory. Sunday had issued $200,000 of 8 percent, 10-year bonds on January 1, 20X4, at 104. Puzzle had purchased $80,000 of the bonds from one of the original owners for $78,400 on December 31, 20X5. Both companies use straight-line write- off of premiums and discounts. Interest is paid annually on December 31. Assume Puzzle uses the fully adjusted equity method. Required: a. What amount of cost of goods sold will be reported in the 20X7 consolidated income statement? Cost of goods sold b. What inventory balance will be reported in the December 31, 20X7, consolidated balance sheet? Consolidated Inventory