Joey Co. holds a 90% ownership interest in Legoria Co and uses the equity method to account for its investment in Legoria Co. Each year, Legoria Co. purchases large quantities of a certain metal used in producing golf clubs. Suppose Joey Co. sold metal priced at $5,000,000 to Legoria in 2016 and at December 31, 2016, Legoria's ending inventory includes $840,000 purchased from Joey.Joey's markup is 20 percent of cost. All of the $840,000 of inventory on hand at year end 2016 is sold to external customers by Legoria in 2017.

1)Give the Consolidated entries needed as of December 31, 2016, to remove all effects of the intercompany transfer in preparing the 2016 Consolidated Financial Statements.

2)Assume no intercompany sales of inventory from Joey Co. To Legoria Co. in 2017. What entry(s), if any, would be needed in 2017 to remove the effects of the intercompany transfer of inventory in 2016?