Please enter the working paper elimination etries E and R

On January 1, 2017, Perfect Corporation issued its stock with a fair value of $231,000 for 60% of the outstanding common stock of Sunny Company, which became a subsidiary of Perfect. There was no control premium. Differences between book value and fair value of the net identifiable assets of Sunny Company on January 1, 2017, were limited to the following:

Book value Fair value

Inventories $ 35,000 $ 33,400

Building (net) 260,000 278,000

Long-term debt 50,000 51,500

Required:

(i) Prepare working paper eliminating entries E and R (in journal entry format) for Perfect Corporation and subsidiary on January 1, 2017.

(ii) Complete the following working paper:

Working paper for consolidated balance sheet on date of business combination, January 1, 2017

	Perfect	Sunny	Adjustments & Eliminations		Consolidated
			Debits	Credits
Cash	80,000	17,000
Inventories	260,000	35,000
Investment in Sunny	231,000
Building (net)	760,000	260,000
Total	1,331,000	312,000
Accounts payable	180,000	72,000
Long-term debt	20,000	50,000
Common stock	350,000	138,000
Add. paid-in capital	623,000
Retained earnings	158,000	52,000
Total	1,331,000	312,000