Spreadsheet (linked at the bottom of the page), perform the accounting required for the elimination of each independent intercompany transaction:

Prepare the book calculations

Perform the required journal entries

Assume that Parent Company decides to sell Equipment (Cost = $10,000, Accumlated Depreciation = $1,000) to Sub for $20,000 cash. Show the sale and the subsequent elimination entries by Parent Company

Parent Company Balance Sheet
Assets, Liabilities & Equities	Book Value
Cash	$1,500,000
AR	$10,000
Inventory	$200,000
Land	$640,000
Equipment	$400,000
Accumulated Depreciation	-$150,000
Patent	$0
Total Assets	$2,600,000
AP	$100,000
Common Stock	$450,000
Additional Paid In Capital	$600,000
Retained Earnings	$1,450,000
Total Liabilities & Equity	$2,600,000

Sub Company Balance Sheet

Assets, Liabilities & Equities

Book Value

Cash

$35,000

AR

$10,000

Inventory

$65,000

Land

$40,000

PP&E

$400,000

Accumulated Depreciation

-$150,000

Patent

$0

Total Assets

$400,000

AP

$100,000

Common Stock

$100,000

Additional Paid In Capital

$50,000

Retained Earnings

$150,000

Total Liabilities & Equity

$400,000

Assume that book Value = Fair Value

Sale By Parent
Account	DR	CR

Acquisition by Sub
Account	DR	CR

Elimination Entries by Parent
Account	DR	CR