Principal Engineering purchased 80% of Simons Solutions in 2019. After the acquisition, Simons began selling inventory to Principal for resale by Principal. During 2021 the following information exists. Principals Beginning 2021 Inventory included $50,000 of inventory purchased from Simons. Simons Gross Profit ratio on this beginning inventory was 30%. During 2021, Simons sold inventory to Principal for $160,000 which had a cost to Simons of $104,000. On December 31, 2021, Principal still had $20,000 of the 2021 purchased material in ending inventory.

Required: Prepare the consolidation elimination entries for 2021.