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During the year ended December 31, 2019, Parent Company (theparent) sold merchandise to Subsidiary Corporation (a 90%-ownedsubsidiary) for a price of $32,340, at a markup of 32% of cost.Subsidiary sold merchandise acquired from Parent to outsidercustomers for $38,500 during 2019. Included in Subsidiary’s January1, 2019, inventories were goods acquired from Parent at a billedprice of $3,036 and included in Subsidiary’s December 31, 2019,inventories were goods acquired from Parent at a billed price of$2,310.(i) Preparethe working paper eliminating entries (in journal entry format)related to the intercompany sale of merchandise for the year endedDecember 31, 2019.(ii) Show how theworking paper eliminating entry in part (i) adjusts cost of goodssold and ending inventory to the correct consolidated balances. Parent Subsidiary Adjustments & EliminationsConsolidatedDebitsCreditsCost of goods soldInventory(iii) How (increase ordecrease and the amount) is Parent’s 2019 equity in income ofSubsidiary affected by the intercompany sale of merchandise?