Several years ago, Preston Inc. acquired an 80% interest in Inkman Co. The book values of Inkman's asset and liability accounts at that time were considered to be equal to their fair values. Preston's acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transaction.

The following selected account balances were from the individual financial records of these two companies as of December 31, 20X1.

Preston Inc.

Inkman Co.

Sales

$896,000

$504,000

Cost of goods sold

406,000

276,000

Operating expenses

210,000

147,000

Retained earnings, 1/1/11

1,036,000

252,000

Inventory

484,000

154,000

Buildings (net)

501,000

220,000

Investment income

Not given

Assume that Preston sold inventory to Inkman at a markup equal to 25% of cost. Intra-entity transfers were $130,000 in 20X0 and $165,000 in 20X1. Of this inventory, $39,000 of the 20X0 transfers were retained and then sold by Inkman in 20X1, while $55,000 of the 20X1 transfers were held until 20X2.

Required:

For the consolidated financial statements for 20X1, determine the balances that would appear for the following accounts.

(1) Cost of Goods Sold

(2) Inventory

(3) Noncontrolling Interest in Subsidiary's Net Income