Pacific Industries consolidates its subsidiary, Salmon Enterprises. It is the end of 2021, and you have the following information on 2021 intercompany transactions between Pacific and Salmon:
•Salmon sold land to Pacific in a previous year at a gain of $25,000. Pacific still owns the land.
•Intercompany profit in Pacific's beginning inventory, purchased from Salmon, is $15,000. Intercompany profit in Pacific's ending inventory, purchased from Salmon, is $12,000. Total sales from Salmon to Pacific, at the price charged to Pacific, were $150,000.
•Pacific sold equipment with original cost of $600,000 and a book value of $500,000 to Salmon at the beginning of 2016 and charged Salmon $900,000. The equipment had a remaining life of 8 years at the time of transfer. Salmon still holds the equipment.
Required
Prepare eliminating entries (I) required to consolidate the trial balances of Pacific and Salmon at the end of 2021.

Question

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The Answer of Pacific Industries consolidates its subsidiary, Salmon Enterprises. It is the end of 2021, and you have the following information on 2021 intercompany transactions between Pacific and Salmon:
•Salmon sold land to Pacific in a previous year at a gain of $25,000. Pacific still owns the land.
•Intercompany profit in Pacific's beginning inventory, purchased from Salmon, is $15,000. Intercompany profit in Pacific's ending inventory, purchased from Salmon, is $12,000. Total sales from Salmon to Pacific, at the price charged to Pacific, were $150,000.
•Pacific sold equipment with original cost of $600,000 and a book value of $500,000 to Salmon at the beginning of 2016 and charged Salmon $900,000. The equipment had a remaining life of 8 years at the time of transfer. Salmon still holds the equipment.
Required
Prepare eliminating entries (I) required to consolidate the trial balances of Pacific and Salmon at the end of 2021.

Pacific Industries Consolidates Its Subsidiary, Salmon Enterprises