Preparing a consolidation work sheet. (Requires coverage of Appendix 11.1.) The condensed balance sheets of Ely Company and Sims Company at December 31 appear in Exhibit 11.18. The receivables of Ely Company and the liabilities of Sims Company contain an advance from Ely Company to Sims Company of \(\$ 7,500\). Ely Company acquired 100 percent of the capital stock of Sims Company on the market at January 2 of this year for \(\$ 70,000\). At that date, the balance in the Retained Earnings account of Sims Company was \(\$ 40,000\). Any excess purchase price relates to goodwill. The firm neither amortizes any goodwill nor finds it impaired.

Prepare a consolidation work sheet for Ely Company and Sims Company. The adjustment and elimination columns should contain entries to (1) eliminate the Investment in the Sims Company account and (2) eliminate intercompany obligations.