Golden Company owns 70% of the voting common stock of Silver Company. At the beginning of 2016, Silvers merchandise inventory included merchandise that was purchased from Golden in the prior year for $10,000 (the cost of that merchandise to Golden was $8,000). During 2016, Silver purchased merchandise from Golden for $32,000 (the cost of which to Golden was $22,000). At the end of 2016, Silvers merchandise inventory included merchandise purchased from Golden for $15,000 (the cost of which to Golden was $12,000). Internally generated income for 2016 was $144,000 for Golden and $80,000 for Silver.

3. In the consolidation worksheet for 2016, what is the entry required to eliminate the effect of intercompany sales of merchandise on beginning inventory?

Debit Retained Earnings Golden $2,000, Credit Cost of Goods Sold $2,000

May someone explain how to get to the answer?