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Yosef Corporation acquired $80\%$ of the outstanding voting stock of Randeep Inc. on January $1,$ Year $6.$ During Year $6,$ intercompany sales of inventory of $$45,000($original cost of $$30,000)$ were made. Only $30\%$ of this inventory was still held within the consolidated entity at the end of Year $6$ and was sold in Year $7.$ Intercompany sales of inventory of $$60,000($original cost of $$35,000)$ occurred in Year $7.$ Of this merchandise, $20\%$ had not been resold to outside parties by the end of the year.

At the end of Year $7,$ selected figures from the two companies' financial statements were as follows:

Yosef Randeep

Inventory $ $70,000$ $$43,000$

Retained earnings, beginning of year $500,000300,000$

Net income $150,00055,000$

Dividends declared $50,00018,000$

Retained earnings, end of year $600,000337,000$

Yosef uses the cost method to account for its investment in Randeep. Both companies pay income tax at the rate of $40\%.$ Required

$($a$)$ Assume that all intercompany sales were upstream. Calculate the amount to be reported on the Year $7$ consolidated financial statements for the following accounts$/$items:

$($i$)$ Consolidated net income

$($ii$)$ Consolidated net income attributable to the controlling and noncontrolling interest

$($iii$)$ Deferred income tax asset

$($iv$)$ Inventory

$($v$)$ Net adjustment to retained earnings at beginning of year pertaining to intercompany sales

$($vi$)$ Net adjustment to retained earnings at end of year pertaining to intercompany sales

$($b$)$ Now assume that all intercompany sales were downstream. Calculate the amount to be reported on the Year $7$ consolidated financial statements for the accounts$/$items listed in part $($a$).$

Additional requirements

Make the following problem edits to the "required" below:

$$ eliminate part a $($vi$)$

$$ replace part a $($v$)$ with the following requirement: Assume Randeep's retained earnings at acquisition date January $1,$ Year $6$ was $$140,000.$ Calculate the Parent's $($Yosef$\text{'}$s$)$ consolidated retained earnings balance at January $1,$ Year $7$ AND December $31,$ Year $7.$

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