Multiple-Year Elimination Entries — Downstream Sales In 2006, Pobe Inc. sold inventory cost¬

ing $50,000 to its 75%-owned subsidiary, Sobe Inc., for $70,000. Sobe resold a portion of this inventory for $65,000 in 2006. At the end of 2006, Sobe’s balance sheet showed $21,000 of intercompany-acquired inventory on hand. Sobe resold this remaining inventory in 2008 for

$28,000.

1. Prepare the general ledger adjusting entry required for 2006, 2007, and 2008, if necessary, under the complete equity method. Omit this requirement if you are using Module 2.

2. Prepare the consolidation elimination entry(ies) at the end of 2006, 2007, and 2008 relating to these intercompany inventory sales.

3. At what amount is the inventory reported in the consolidated statements at the end of 2006 and 2007?