Solve both 1,2 with details .

Question 6 Also think about how the adjustment will change if this was an UPSTREAM sale. Hint: You would need to debit NCI when doing the beginning inventory adjustment. PROBLEM 6-5 Intercompany Downstream Sales, Cost Method LO 6 Pruitt Corporation owns 90% of the common stock of Sedbrook Company. The stock was purchased for $625,500 on January 1,2017 , when Sedbrook Company's retained earnings were $95,000. Preclosing trial balances for the two companies at December 31, 2021, are presented here: The January 1,2021, inventory of Sedbrook Company includes $25,000 of profit recorded by Pruitt Corporation on 2020 sales. During 2021, Pruitt Corporation made intercompany sales of $250,000 with a markup of 20% on cost. The ending inventory of Sedbrook Company includes goods purchased in 2021 from Pruitt for $60,000