Salinas's stockholders' equity consisted of $10,000 of Capital Stock and $5,000 of Retained Earnings. The difference between the fair value and book value of Salinas's net assets was allocated solely to a patent amortized over 5 years. The separate company accounts and items for Ponce and Salinas at December 31, 2019, appear below.

Accounts or Items                                 Ponce Corp.    Salinas Corp.
Sales                                                               $20,000     $15,000
Cost of Sales                                                    9,200         4,700
Gross profit                                                    10,800       10,300
Operating Expenses                                       2,300           4,000
Income from operations                                8,500           6,300
Income from Salinas Corp                              3,300          ------
Net income                                                     11,800       6,300
Retained Earnings, January 1, 2019            11,000       5,000
Net income                                                     11,800        6,300
Dividends                                                           3,000          2,000
Retained Earnings, December 31, 2019    19,800          9,300

Assets:

Cash                                                                 2,000            1,900
Accounts Receivable (Net)                          12,000           5,500

Inventory                                                      14,000            8,000
Patent                                                               -----              ---------

Land                                                               27,000           42,000
Building and Equipment (Net)                    60,000            43,000
Investment in Salinas Corp.                        31,300                --------
Total Assets                                                   146,300          100,400

Liabilities and Equity

Accounts Payable                                          96,500             81,100

Common Stocks                                           30,000             10,000

Retained Earnings                                       19,800                 9,300

Total liabilities and Equity                    $146,300              $100,400

1. What method for internal purposes use Parent Company?
2. Prepare in Journal form the eliminations entries and adjustments for consolidation purposes.
3. Prepare the required consolidated financial statements.