Problem 2 Sue Company (an 80%-owned subsidiary) sells merchandise to its parent Pony Corporation at a 15% markup on cost. During the year ended December 31,2015 Pony sold $75,330 of the intercompany merchandise acquired from Sue to outside customers. Pony paid $71,820 to acquire merchandise from Sue in 2015. Included in Ponys December 31, 2015, inventories were goods acquired from Sue at a billed price of $19,980

Prepare the working paper entry (in journal entry format) for the intercompany sale of merchandise for Pony Corporation and subsidiary for the year ended December 31, 2015. Based on the above information, what are the amounts of consolidated cost of goods sold and consolidated ending inventory reported on the 2015 consolidated financial statements? How (increase or decrease and the amount) is Ponys 2015 equity in income of Sue affected by the intercompany sale of merchandise?