The price of high-quality burnwhistles fluctuates substantially from month to month. As a result, it is not uncommon for a company that deals in burnwhistles to report a substantial gain in one period, followed by a substantial loss in the following period. The price of burnwhistles was relatively high during the first three months of 20X8, declined substantially for the next four months, and then recovered nicely by year-end. On February 6, 20X8, Trent Company purchased burnwhistles for $400,000 and sold them to Gord Corporation on July 10, 20X8, for $300,000. Gord held its purchase for several months before selling 60 percent to nonaffiliates for $360,000 in late November. The remaining units were held at year-end and are expected to be sold in early 20X9 for approximately $240,000. Gord owns 75 percent of the stock of Trent Company.

Required 

a. Give the journal entries Trent and Gord recorded during 20X8 related to the initial purchase, intercorporate sale, and resale of inventory.

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

c. If Gord reported operating income of $230,000 and Trent reported net income of $80,000, what amount of income should be assigned to the controlling interest in the 20X8 consolidated income statement? 

d. Give the workpaper eliminating entry or entries needed in preparing consolidated financial statements for 20X8 to remove all effects of the intercompany transfer.