Pryor Corp. owns 100% of the common stock of Stark Inc. Pryor Corp.’s investment in Stark Inc. is recorded in its ledger as “Investment in Stark Inc.” with a debit balance of $11,150,000. The stockholders’ equity of Pryor Corp. and Stark Inc. for the year ending December 31, 20Y6, is as follows:

a. Prepare the elimination entry that would be made in the spreadsheet for preparing the consolidated balance sheet.
b. Show how the stockholders’ equity of Pryor Corp. and Subsidiary would be reported on the consolidated balance sheet.

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Common stock Retained earnings Pryor Corp. $ 12,000,000 125,000,000 Stark Inc. $2,500,000 8,650,000