Phone Corporation owns 80 percent of Smart Company’s stock. At the end of 20X8, Phone and Smart reported the following partial operating results and inventory balances:

Phone regularly prices its products at cost plus a 40 percent markup for profit. Smart prices its sales at cost plus a 20 percent markup. The total sales reported by Phone and Smart include both intercompany sales and sales to nonaffiliates.

Required

a. What amount of sales will be reported in the consolidated income statement for 20X8?

b. What amount of cost of goods sold will be reported in the 20X8 consolidated income statement?

c. What amount of consolidated net income and income to controlling interest will be reported in the 20X8 consolidated income statement?

d. What balance will be reported for inventory in the consolidated balance sheet for December 31, 20X8?

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Total sales Sales to Smart Company Sales to Phone Corporation Net income Operating income (excluding investment income from Smart) Inventory on hand, December 31, 20X8, purchased from: Smart Company Phone Corporation Phone Smart Corporation Company $660,000 $510,000 140,000 70,000 48,000 240,000 20,000 42,000