2) At December 31, 2020, The Comparative income statements of Philly Corporation and Silly Corporation were as follows (in thousands):

	Philly	Silly
Sales	$3,200	$1,300
Income from Silly	384
Total revenue	3,584	1,300
Less: Cost of goods sold	1,800	400
Operating expenses	800	400
Net income	$984	500

Additional information

1. Philly Corporation acquired 80 percent of Silly for $1,600,000 on January 1, 2018, when Sillys stockholders equity at book value was $1,400,000.

2. The excess of the cost of Phillys investment in Silly over book value acquired was allocated

$60,000 to undervalued inventories that were sold in 2018, $80,000 to undervalued equipment

with a four-year remaining useful life, and the remainder to goodwill.

Required:

1- prepare the required elimination entries in 2020. show your computations

2- Prepare a consolidated income statement for Philly Corporation and Subsidiary for the year

ended December 31, 2020.