Facts: Sub Co is a 90% owned subsidiary of Parent Co, acquired for $94,500 cash on July 1, 2016, when Sub's net assets consisted of $100,000 capital stock and $5,000 retained earnings. The cost of Parent Co's 90% interest in Sun was equal to book value and fair value of the interest acquired. Parent Co sells inventory items to Sub Co on a regular basis, and the intercompany transaction data for 2019 are as follows:

Sales to Sub Co in 2019 (cost $15,000), selling price

$20,000

Unrealized profit in Sub Co's inventory at December 31, 2018

(inventory was sold during 2019)

2,000

Unrealized profit in Sub Co's inventory at December 31, 2019

2,500

Sub Co's accounts payable to Parent Co at December 31, 2019

10,000

At December 31, 2018, Parent Co's investment in subsidiary account had a balance of $128,500. This balance consisted of Parent Co's 90% equity in Sub's $145,000 net assets on that date less $2,000 unrealized profit in Sub's December 31, 2018 inventory. During 2019 Parent Co made the following entries in its records for its investment in Sub:

DR

CR

Cash

9,000

Investment in subsidiary

9,000

To record dividends from Sub Co ($10,000 * 90%)

Investment in subsidiary

26,500

Income from subsidiary

26,500

To record income from Sub Co for 2019 as follows:

Equity in Sub Co's net income ($30,000 * 90%) $27,000

Add: 2018 inventory profit recognized in 2019 2,000

Less: 2019 inventory profit deferred at year-end (2,500)

Total $26,500

The 2018 intercompany sales that led to the unrealized inventory profits were recognize in 2019 and the full amount of the unrealized inventory profit originating in 2019 is deferred at December 31, 2019. Parent Co's investment in Sub Co increased from $128,500 at January 1, 2019 to $146,000 at December 31, 2019, the entire change consisting of $26,500 income less $9,000 dividends for the year.

Required: Using the Excel file "Case 1 - Advanced accounting topics" and the worksheet "Intercompany," prepare and show the required adjusting and eliminating journal entries (in journal entry form) and complete the worksheet, posting the journal entries to the worksheet and completing the Consolidated column with the totals.