Make working paper eliminating entry related to transaction

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Reference no: EM132731275

Sketchy Shoes is a subsidiary of Pacific Brands. Pacific routinely sells merchandise to Sketchy at a 25% markup on cost. Information on intercompany merchandise transactions is below (in thousands):

Inventory balance on Sketchy's books, purchased from Pacific Brands, January 1, 2017 $ 13,750

Inventory balance on Sketchy's books, purchased from Pacific Brands, December 31, 2017 14,575

Total sales revenue recorded by Pacific Brands on merchandise sales to Sketchy in 2017 550,000

Required

Problem a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2017.

Reference no: EM132731275

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