1. Parent Corporation owns 90 percent of Subsidiary Company's stock. During 2018, Parent sold inventory purchased $48,000 to Subsidiary for $60,000. Subsidiary then sold half of the inventory to a nonaffiliate by the end of the year. On 2018, Parent sold $15,000 inventory which was purchased from Subsidiary in 2017. The cost of inventory for Subsidiary was $10,000.Prepare Parent's adjusting journal entries and the consolidation entries that related to intercompany sale of inventory for 2018. (Remember to include all necessary reversal journal entries to Parent's accounts in the consolidation entries)
2. Parent Corporation holds 70 percent of Subsidiary Company's voting common stock. On January 1, 2011, Parent paid $500,000 to acquire a building with a 10-year expected economic life. Parent uses straight-line depreciation for all depreciable assets. On December 31, 2016, Subsidiary purchased the building from Subsidiary for $180,000 and resumed the same remaining useful life.Prepare Parent's adjusting journal entries and the consolidation entries that related to intercompany sale of building for 2018. (Remember to include all necessary reversal journal entries to Parent's accounts in the consolidation entries)