The following information provides an overview of the intercompany sale process using land as an example.

On 3/31/X5, Parent Inc. sold land costing $10,000 to its 100% owned subsidiary, Sub Inc., for $15,000. Sale from Sub Inc to outsider for $25,000

Prepare consolidation worksheet entries with and without adjusting the equity method accounts on the following:

1. Consolidation entry(ies) as of 12/31/X5 and 12/31/X6.
2. Consolidation entry at 12/31/X7, assuming that Sub sold the land in 20X7 for $25,000.