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Consolidation Eliminating Entries with Intercompany Merchandise Sales Pebbles Corporation acquired all of the voting stock of Spinner Company on January $1,2020,$ at a cost of $$20\mathrm{.}0$ million, when Spinner book value was $$4\mathrm{.}0$ million consisting of $$1\mathrm{.}0$ million capital stock and $$3\mathrm{.}0$ million retained earnings. The excess of acquisition cost over book value was attributed to $$6\mathrm{.}0$ million of previously unreported developed technology $(5-$year life, straight$-$line$),$ and goodwill which is not impaired. Pebbles sells merchandise to Spinner on a regular basis. During $2023$ Spinner recorded intercompany purchases of $ $500,000$ its beginning inventory included a markup of $$100,000$ and its ending inventory included a markup of $$75\mathrm{.}000$ Spinner's book value at the beginning of $2023$ is $$8\mathrm{.}5$ million consisting of capital stock of $$1\mathrm{.}0$ million and retained earnings of $$7\mathrm{.}5$ million Spinner reports net income of $$1\mathrm{.}3$ million and declares no dividends. Pebbles uses the complete equity method to account fo its investment on its own books. Compute equity and net income for $2023$ and the December $31$ balance for Pebbles investment in Spinner, as reported on Pebbles books. Prepare eliminating entries necessary to consolidate the trial balances of pebbles and spinner at December $31,2023$ and journal entry form.Consolidation Eliminating Entries with Intercompany Merchandise Sales

Pebbles Corporation acquired all of the voting stock of Spinner Company on January $1,2020,$ at a cost of $$20\mathrm{.}0$ million, when Spinner's

book value was $$4\mathrm{.}0$ million, consisting of $$1\mathrm{.}0$ million capital stock and $$3\mathrm{.}0$ million retained earnings. The excess of acquisition cost

over book value was attributed to $$6\mathrm{.}0$ million of previously unreported developed technology $(5-$year life, straight$-$line$),$ and goodwill,

which is not impaired. Pebbles sells merchandise to Spinner on a regular basis. During $2023,$ Spinner recorded intercompany

purchases of $$500,000$ its beginning inventory included a markup of $$100,000$ and its ending inventory included a markup of $$75,000$

Spinner's book value at the beginning of $2023$ is $$8\mathrm{.}5$ million consisting of capital stock of $$1\mathrm{.}0$ million and retained earnings of $$7\mathrm{.}5$

million. Spinner reports net income of $$1\mathrm{.}3$ million and declares no dividends. Pebbles uses the complete equity method to account for

its investment on its own books.

Required

Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions.

a$.$ Compute equity in net income for $2023$ and the December $31,2023,$ balance for Pebbles' investment in Spinner, as reported on

Pebbles' books.

$2023$ Equity in net income:

$2023$ Investment in Spinner: :

b$.$ Prepare eliminating entries $($C$),($I$),($E$),($R$),$ and $($O$)$ necessary to consolidate the trial balances of Pebbles and Spinner at December

$31,2023,$ in journal entry form.

$($C$)$ :

$($I$)$ : To eliminate intercompany profit in downstream beginning inventory.

$($I$)$ : To eliminate intercompany purchases.

$($I$)$ : to eliminate intecompany, profit and ending in inventory

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