Parent Ltd. pays $553,000 cash for 70% of the outstanding voting shares of Sub Ltd. on January 1, 20X5. The following information was available:

During 20X5, Sub Ltd. earned $180,000 and paid no dividends. The inventory on hand at January 1, 20X5, was sold during 20X5. The equipment will be depreciated over 10 years straight-line; the building will be depreciated over 20 years straight-line. The liabilities were paid during 20X5. Parent Ltd. uses the cost method of accounting for its investment.

Required
Prepare the consolidation-related eliminations required at December 31, 20X5, based on the above information under the entity method.

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Sub Ltd. Statement of Financial Position January 1, 20X5 Carrying value $ 40,000 Fair value $ 40,000 Cash Inventory 40,000 30,000 Equipment, net Building, net 120,000 100,000 300,000 360,000 Land 160,000 50,000 $550,000 $ 10,000 Liabilities 14,000 Common shares 250,000 Retained earnings 290,000 $550,000