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On December 31, 2016, Parent Co purchased 100% of the outstanding common stock of Subsidiaries 'R Us for $100,000. Throughout 2017, Parent Co sold inventory that they purchased for $30,000 to Subsidiaries 'R Us for $50,000. At the end of 2017, Subsidiaries 'R Us had $40,000 of inventory related to these transactions still on hand.
Problem a. Record the elimination entry required for this transaction at the end of 2017 assuming that all inventory was sold to a 3rd party in 201? ("t1" entry). Include the parent and sub's entries for partial credit.
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