Proud Company and Slinky Company both produce and purchase equipment for resale each period and frequently sell to each other. Since Proud Company holds 60 percent ownership of Slinky Company, Proud's controller compiled the following information with regard to intercompany transactions between the two companies in 20X5 and 20X6:

Required
a. Give the elimination entries required at December 31, 20X6, to eliminate the effects of the inventory transfers in preparing a full set of consolidated financial statements.
b. Compute the amount of cost of goods sold to be reported in the consolidated income statement for20X6.

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Percent Resold to Nonaffiliate in 20X5 Cost to Sale Price Year Produced by 20X5 Proud Company Slinky Company 60% 20x5 Slinky Company Proud Company 30 20X6 Proud Company Slinky Company 20X6 Slinky Company Proud Company Sold to 20X6 Produce to Affiliate 40% $100,000 $150,000 70,000 100,000 60,000 200,000 40,000 50 90 25 40,000