Power Wholesale Company based in the UK acquired 90% shares of common stock of Green Company in Germany on December 31, 2019. During 2020, Power purchased 3,500 units of inventory for 40 each for cash and sold 3,000 units of them Green for 45 each for cash. Green sold 2,200 units of these units to others for $60 each for cash. Both companies use perpetual inventory system. Required:

a) Is the inventory transfer in this example a downstream or upstream sale? Why?

b) Give journal entries Power Company recorded for the purchase of inventory and resale to Green Company in 2020.

c) Give journal entries Green Company recorded for the purchase of inventory and resale to others in 2020

d) Prepare the elimination entry needed to remove the effect of the intercompany transactions

e) Prepare Equity method adjustment entry for the inventory transfer.