A Company holds 80% of B Company stock. In the current year A reports sales of $800,000 and cost of goods sold $600,000. For the same period, B has sales of $400,000 and cost of goods sold of $280,000. In the prior year, A sold inventory to B for $100,000, which cost A $75,000. B had $20,000 of this inventory on hand at year end. During the current year, A sold inventory to B for $120,000, which cost A $96,000. At year end B possesses 40% of the inventory. A had established the transfer price on its normal gross profit rate.

Required:

Prepare the consolidation entries necessitated by the intra-company sales.