On January $1,2018,$ Pal Corporation acquired $80\%$ of the voting stock of Secam Corporation for $$24,000$ when Secam had Capital Stock of $$10,000$ and Retained Earnings of $$8,000.$ On this date, the book value of Secam's assets and liabilities was equal to the fair value, except for inventories, which were understated on the books by $$1,000$ and were sold in $2018,$ land which was undervalued by $$2,000,$ and equipment with a remaining useful life of $5$ years under the straight$-$line method which was undervalued by $$3,000.$ Any remainder was assigned to goodwill.

Financial statements for the two corporations at the end of the fiscal year ended December $31,2019,$ appear in the first two columns of the partially completed consolidation working papers. Pal has accounted for its investment in Secam using the equity method of accounting. Pal Corporation owed Secam Corporation $$200$ on open account at the end of the year. Dividends. receivable in the amount of $$900$ payable from Secam to Pal is included in Pal's net receivables.

Required:

Prepare the elimination entries required for consolidation on December $31,2019.$ Show all your calculations.

Complete the consolidation working papers for Pal Corporation and Subsidiary for the year ended December $31,2019.$

State which items have been amortized and which have not in $2019,$ and why?

$(30$ Marks$)$