consolidate Parent and Subsidiary:

*At the bottom of your worksheet is an amount of Intercompany Sales, from Subsidiary to Parent. Those sales were made to generate a gross profit at the percentage indicated with the intercompany sales amount. Just to be clear, the Intercompany Sales amount is at the selling price from Subsidiary to Parent

*Of the intercompany sales, one-half of the sales remain in Parent Company's inventory (part of Current Assets). Round if you must, do everything in whole dollars. Make appropriate adjustments for the inventory.

*Parent Company charges a "management fee" to Subsidiary Company (related to services that Parent Company performs for Subsidiary). The fee is 1.5% of Subsidiary's sales. Subsidiary records the expense in "Administrative expense." Parent Company records the income in "Other Expense" (since it's income, it reduces the "Other expense" amount)