Perkins Company owns 85% of Sheraton Company. Perkins Company sells merchandise to Sheraton Company at 20% above
Question:
Perkins Company owns 85% of Sheraton Company. Perkins Company sells merchandise to Sheraton Company at 20% above cost. During 2011 and 2012, such sales amounted to $450,000 and $486,000, respectively. At the end of each year, Sheraton Company had in its inventory one-third of the amount of goods purchased from Perkins during that year.
Required:
Prepare the workpaper entries necessary to eliminate the effects of the intercompany sales for 2011 and 2012.
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20 11 1 Sales 450000 Purchases Cost of Goods Sold 450000 To eliminate intercompany sales 2 Ending ...View the full answer
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