3. On January 1, 2018, Pearson Company acquired 80% of the common stock of Stratton Company for $750,000. On this date, Stratton had total owners' equity of $540,000. Any excess of cost over book value is attributable to land, undervalued $10,000, and to goodwill. During 2018 and 2019, Pearson has appropriately accounted for its investment in Stratton using the simple equity method. On January 1, 2019, Pearson held merchandise acquired from Stratton for $10,000. During 2019, Stratton sold merchandise to Pearson for $100,000, of which $20,000 is held by Pearson on December 31, 2019. Stratton's usual gross profit on affiliated sales is 40%. On December 31, 2019, Pearson still owes Stratton $20,000 for merchandise acquired in December. On January 1, 2019, Pearson sold to Stratton some equipment with a cost of $50,000 and a book value of $20,000. The sales price was $40,000. Stratton is depreciating the equipment over a five-year life, assuming no salvage value and using the straight-line method. Required: Prepare all worksheet eliminations that would be made on the 2019 consolidated worksheet as a result of: a) the intercompany sale of inventory b) the intercompany sale of equipment 7 pts