1) King Inc. owns 70% of Prince Co.'s outstanding common stock. King's liabilities total $450,000, and Prince's liabilities total $150,000. Included in Prince's financial statements is a $50,000 accounts payable to King. What amount of total liabilities should be reported in the consolidated financial statements? What is the journal entry needed for the consolidated worksheet?

2) Mom owns 100% of the capital stock of both Daughter Corp. and Son Corp. Daughter purchases merchandise inventory from Son at 120% of Son's cost. During year 1, merchandise that cost Son $50,000 was sold to Daughter. Daughter sold all of this merchandise to unrelated customers for $80,000 during year 1.

a) What is the intercompany sales revenue that will be eliminated in the consolidated worksheet? What is the elimination entry?

b) What is the consolidated revenue and cost of goods sold for these transactions? Show your calculation.