Saucony Company, a wholly-owned subsidlary of Puma Company, purchased a tract of land from Puma in 2016 for \($4,000,000.\) Puma originally acquired the land for \($1,500,000\) and accounts for its investment in Saucony using the complete equity method.

Required

a. Assuming that Saucony still owns the land, give the working paper eliminations needed for the intercompany land sale when consolidated statements are prepared at the end of 2016 and 2017.

b. If Saucony sells the land to a third party for \($6,500,000\) in 2018, prepare the eliminations needed for the intercompany land sale when consolidated statements are prepared at the end of 2018.