On January $1,$ Year $2,$ PAT Ltd$.$ acquired $90\%$ of SAT Inc. when SAT's retained earnings were $$980,000.$ There was no acquisition

differential. PAT accounts for its investment under the cost method. SAT sells inventory to PAT on a regular basis at a markup of $30\%$ of

selling price. The intercompany sales were $$120,000$ in Year $2$ and $$150,000$ in Year $3.$ The total amount owing by PAT related to these

intercompany sales was $$20,000$ at the end of Year $2$ and $$10,000$ at the end of Year $3.$ On January $1,$ Year $3,$ the inventory of PAT

contained goods purchased from SAT amounting to $$30,000,$ while the December $31,$ Year $3,$ inventory contained goods purchased

from SAT amounting to $$40,000.$ Both companies pay income tax at the rate of $40\%.$

Selected account balances from the records of PAT and SAT for the year ended December $31,$ Year $3,$ were as follows:

Required:

$($a$)$ Determine the amount to report on the Year $3$ consolidated financial statements for the selected accounts noted above. $($Input all

amounts as positive values. Omit $ sign in your response.$)$

Inventory

Accounts payable

Retained earnings, beginning of year

Sales

Cost of sales

Income tax expense

$

$($b$)$ This part of the question is not part of your Connect assignment.