Upstream Intercompany Inventory profits in 1/1/2018 and 12/31/2018; Downstream Intercompany Inventory Profits in 1/1/2018 and 12/31/2018---- Pick and Stitch routinely sell inventory to each other. The profit margin on intercompany sales is 40% across all years. During 2018 Pick sold merchandise to Stitch for $80,000. At December 31, 2018, $10,000 of this merchandise remained in Stitch's inventory. During 2018 Stitch sold merchandise to Pick for $70,000. At December 31, 2018, $16,000 of this merchandise remained in Pick's inventory. At December 31, 2018, $8,000 of these intercompany sales remained unpaid by Pick