There is no answer for this question. Can you assist me with part 3 and part 6. Thanks.

Week 4 Learning Resources Please read and view this week's Learning Resources before you complete the Discussion. Readings Course Text Advanced Accounting Chapter 4, Intercompany Transactions: Merchandise, Plant Assets, and Notes This chapter introduces several of the transactions between affiliate companies. Specifically, the chapter discusses why intercompany transactions must not be recorded in consolidated statements, how to eliminate redundant accounting for sales, and how to eliminate loans and notes between the companies. Chapter 5, Intercompany Transactions: Bonds and Leases Chapter 5 discusses more intercompany transactions, specifically those that involve one company giving a loan or lease to one of its affiliates. Discussion - Week 3 Collapse Eliminating Intercompany Transaction Effects The importance of providing relevant accounting information to a firm's external stakeholders is key to giving investors and creditors a clear picture of the true financial position and performance of a company. This, in turn, will allow these stakeholders to make sound investment and business decisions. However, excessive transactions between a company and its subsidiaries can cloud the picture through misleading reporting of sales revenue, assets, or liabilities. To help you think about the elimination of intercompany sales, watch Always Accountable, episode 22, in this week's Resources. In this video, Chen asks the EarthShare Ice Cream Company's sales to their parent company. With these thoughts in mind: FASB requires companies to eliminate the effects of transactions between a parent and its subsidiaries. In this week's Discussion, you will consider why FASB has this rule. Post by Day 3 at least 200 words answering the following questions: Why do you think FASB requires companies to eliminate intercompany transactions on their consolidated financial statements? How might failing to eliminate intercompany transactions mislead investors? Application Intercompany Transactions Exercises Answer the following in a Word document: P Corporation owns 75 percent of its subsidiary, S Company. The price P Corporation paid for S Company was equal to 75 percent of the book value of S Company's net assets. P Corporation accounts for its investment in S Company under the cost method of accounting. Income statements for the year ending December 31, 2010, are as follows. P Corporation Income Statement Year ending December 31, 2010 Sales 1,200,000 Cost of goods sold (875,000) Gross profit 325,000 SG & A expense (115, 000) Net income 210,000 S Company Income Statement Year ending December 31, 2010 Sales 847,000 Cost of goods sold (638,000) Gross profit 209,000 SG & A expense (54,000) Net income 155,000 1. In 2010, P Corporation purchased goods (to be held in inventory) from S Company for cash of $125,000. S Company recorded $93,000 in cost of goods sold when the sale was made. P Corporation resold all of the items to a customer for $165,000. Prepare the necessary journal entry or entries to eliminate intercompany profits and the doublecounting of sales. 2. Assume that in the preceding scenario, P Corporation sold only half of the goods it acquired from S Company at a price of $82,500. Prepare the necessary journal entry or entries to eliminate intercompany profits, the double-counting of sales, as well as any effect the intercompany transaction has on ending inventory. 3. In 2010, P Corporation purchased an investment in another company from S Company for $70,000. S Company originally paid $55,000 for this investment. Prepare the necessary journal entry or entries to eliminate the intercompany sale. 4. On January 1, 2010, P Corporation purchased a piece of equipment from S Company to use in its manufacturing operations. P Corporation paid $55,000 for the equipment. S Company paid $80,000 for the equipment when the equipment was purchased on January 1, 2007. The equipment had a useful life of 8 years, and as of the date of the sale, S Company had recorded accumulated depreciation of $30,000 for this equipment. Like S Company, P Corporation also uses straight-line depreciation, and there is no anticipated change in the useful life of the equipment. Prepare the necessary journal entries to eliminate the intercompany sale and adjust depreciation expense accordingly. 5. P Corporation borrowed $30,000 from S Company on February 1, 2010. To effect this transaction, P Corporation issued a 10 percent, 2-year note. Two interest payments are required on the note: the first on January 31, 2011, and the second when the note matures. Prepare the necessary journal entry or entries to eliminate the intercompany loan. 6. S Company issued 10-year, 8 percent bonds with a face value of $200,000 to P Corporation on July 1, 2010. The bonds were issued at par value. Interest on the bonds is payable semiannually on December 31 and June 30. Prepare the journal entry or entries to eliminate the intercompany bonds