On January 1, 2020, Parent Company acquired 100% of the common stock of Subsidiary Company for $1,000,000. On this date Subsidiary had total owners' equity of $750,000.

Any excess of cost over book value is attributable to land, undervalued $50,000, and to goodwill.

During 2020 and 2021, Parent has appropriately accounted for its investment in Subsidiary using the simple equity method.

On January 1, 2021, Parent held merchandise acquired from Subsidiary for $15,000. During 2021, the Subsidiary sold merchandise to Parent for $150,000, of which $25,000 was held by Parent on December 31, 2021. The subsidiary's usual gross profit on affiliated sales is 40%.

On December 31, 2021, Parent still owes Subsidiary $10,000 for merchandise acquired in December.

On January 1, 2021, Parent sold to Subsidiary some equipment with a cost of $80,000 and a book value of $30,000. The sales price was $50,000. Subsidiary is depreciating the equipment over a five-year life, assuming no salvage value and using the straight-line method.

Required:

Prepare the worksheet elimination (JOURNAL ENTRY FORM) that would be made on the 2021 consolidated worksheet as a result of:

1) the intercompany sale of inventory

2) the intercompany sale of equipment