On January 1, 2015, Purple Rain Company acquired Sunshine Company. Purple Rain Company paid $60 per share for 80% of Sunshines common stock. The price paid by Purple reflected a control premium. The NCI shares were estimated to have a market value of $55 per share. On the date of acquisition, Sunshine had the following balance sheet:

Sunshine Company
Balance Sheet
1-Jan-15
Assets	Liabilities
Accounts receivable	$60K	Accounts Payable	$40K
Inventory	$40K	Bonds Payable	$100K
Land	$60K	Common Stock($1Par)	$10K
Build	$200K	Paid in excess of par	$90K
Accumulated Depreciation	-$50K	Retained Earnings	$112K
Equipment	$72K
Accumulated depreciation	-$30K

Buildings, which have a 20-year life, were understated by $120,000. Equipment, which has a 5-year life was understated by $40,000. Any remaining excess was considered goodwill. Purple used the simple equity method to account for its investment in Sunshine.

January 1, 2016, Purple held merchandise sold to it from Sunshine for $12,000. This beginning inventory had an applicable gross profit of 20%. During 2016, Sunshine sold merchandise to Purple for $90,000. On December 31, 2016, Purple held $18,000 of this merchandise in its inventory (applicable gross profit rate of 25%). Purple owed Sunshine $20,000 on December 31, 2016 as a result of this intercompany sale.

On January 1, 2016, Purple sold equipment with a book value of $35,000 to Sunshine for $45,000. Purple also sold assets to nonaffiliates. During 2016, the equipment was used by Sunshine. Depreciation is computed over a 5-year life, using the straight-line method.

Purple and Sunshine had the following trial balances on December 31, 2016 (end of second year):

	Purple rain	Sunshine
Cash	24000	132000
Accounts receivable	90000	45000
Inventory	120000	56000
Land	100000	60000
Investment in Sunshine	512000
Buildings	800000	200000
Accumulated depreciation- bldgs	-220000	-65000
Equipment	150000	72000
Accumulated depreciation- Equip	-90000	-46000
Goodwill
Accounts payable	-60000	-102000
Bond payable		-100000
Common Stock- Sunshine		-10000
Paid-in capital in excess of par- Sunshine		-90000
Retained earnings- Sunshine		-142000
Common stocks- Purple	-100000
Paid-in capital in excess of par- purple	-800000
Retained earnings- Purple	-365000
Sales	-800000	-350000
Cost of goods sold	450000	208500
Depr. expense- building	30000	7500
Depr. expense- equipment	15000	8000
Other expenses	160000	98000
Interest expense		8000
Gain on fixed asset sale	-20000
Subsidiary income	-16000
Dividends declared- Sunshine		10000
Dividends declared- Purple	20000
Totals	0	0

1. Write out the elimination entries (in journal form) for the December 31, 2016 consolidation.