QUESTION $1.$

Puma Company owns $80\%$ of the common stock of Smarte Company. Puma sells merchandise to Smarte at $20\%$ above cost. During $2017$ and $2018,$ intercompany sales amounted to $$1,080,000$ and $$1,200,000$ respectively. At the end of $2017,$ Smarte had one$-$fifth of the goods purchased that year from Puma in its ending inventory. Smarte's $2018$ ending inventory contained one$-$fourth of that year's purchases from Puma. There were no intercompany sales prior to $2017.$

Puma reported net income from its own operations of $$720,000$ in $2017$ and $$760,000$ in $2018.$ Smarte reported net income of $$400,000$ in $2017$ and $$460,000$ in $2018.$ Neither company declared dividends in either year.

Required:

A$.$ Prepare in general journal form all entries necessary on the consolidated statements workpapers to eliminate the effects of the intercompany sales for both $2017$ and $2018.$

B$.$ Calculate controlling interest in consolidated net income for $2018.$