1. Pearlwater Corporation owns 100% of its subsidiary, Snapall Corporation. Intercompany sales for 2019 and related inventory balances are as follows:

	Pearlwater	Snapall
Beginning inventory acquired from affiliate, reported on buyers books	$ 30,000	$ 18,000
Ending inventory acquired from affiliate, reported on buyers books	27,600	19,200
Intercompany sales to affiliate	500,000	400,000

Pearlwater sells merchandise to Snapall at a markup of 20% on cost. Snapall sells merchandise to Pearlwater at a markup of 25% on cost.

Required

Prepare the eliminating entries required to consolidate the trial balances of Pearlwater and Snapall.