Eagle Corporation owns 80% of Flyway Inc.'s common stock that was purchased at its underlying book value. The two companies report the following information for 2004 and 2005.
During 2004, one company sold inventory to the other company for $50,000 which cost the transferor $40,000. As of the end of 2004, 30% of the inventory was unsold. In 2005, the remaining inventory was resold outside the consolidated entity.
If the sale referred to above was a downstream sale, the total sales revenue reported in the consolidated income statement for 2004 would be?

a. $870,000.
b. $880,000.
c. $920,000.
d. $970,000.

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Eagle 2004 Selected Data: Flyway Sales Revenue 600,000 320,000 Cost of Goods Sold 320,000 155,000 Other Expenses 100,000 89,000 Net Income 1800,000 76,000 Dividends Paid 19,000 2005 Selected Data: Eagle Flyway Sales Revenue 580,000 445,000 Cost of Goods Sold 300,000 180,000 Other Expenses 130,000 171,000 94,000 Net Income 150,000 Dividends Paid 16,000 5,000