Q1: Assume you have that you have the following information when preparing the consolidated financial statements in 2020 (fiscal year end is 12/31/2020). The consolidated entity includes the parent company and an 80%-owned subsidiary.

1. On January 1, 2018, the subsidiary sold to its parent, for a sale price of $120,000, equipment that originally cost $180,000. The subsidiary originally purchased the equipment on January 1, 2015, and depreciated the equipment assuming a 12-year useful life (straight-line with no salvage value). The parent adopted the subsidiarys depreciation policy and depreciates the equipment over the remaining useful life. The parent used the full equity method to account for its Equity Investment.

2. During 2020, the subsidiary sold goods to the parent company for $230,000 that cost $180,000. The parent company still owned 30% of the goods at the end of 2020. During 2019, the parent sold goods to the subsidiary for $200,000 that cost $170,000. The subsidiary sold 80% of goods in 2019 and the rest 20% in 2020.

Prepare the related consolidation entries for the year 2020 based on the above information.