Shiek Shoes sold an administrative building to its parent, Pearl Industries, on January 1, 2015, for \($8,000,000.\) At the time of sale, the building was carried on Shiek's books at original cost of \($10,000,000,\) with \($8,500,000\) of accumulated depreciation. At the date of sale, the building had a remaining life of 20 years, and straight-line depreciation is appropriate. It is now December 31, 2017, the end of the accounting year, and you are preparing the working paper to consolidate the trial balances of Pearl and Shiek. Pearl still owns the building. 

Required

a. Prepare the required eliminating entries for this intercompany building sale for the December 31, 2017, consolidation working paper.

b. What balances does Pearl report in its own trial balance for this building at December 31, 2017? Consider these balances: building, original cost; accumulated depreciation, building; depreciation expense, building. What balances should be reported on the consolidated trial balance? Show how the eliminating entries in part a adjust Pearl's book balances to the correct consolidated balances.