Par Ltd. purchased 100% of the voting shares of Sub Ltd. for $1,400,000 on October 1, 2006. The balance sheet of Sub Ltd. at that date was:

Required:

Prepare the eliminating entry (or entries) required at the date of acquisition that would be necessary to consolidate the financial statements of Sub Ltd. with those of Par Ltd.

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Cash Receivables Inventory Capital assets, net Current liabilities Long-term liability Common shares Retained earnings Sub Ltd. Balance Sheet October 1, 2006 Net book value $ 300,000 410,000 560,000 1,220,000 $2,490,000 $ 340,000 700,000 400,000 1,050,000 $2,490,000 Fair market value $300,000 370,000 750,000 920,000 370,000 700,000