Prepare in general journal form the workpaper entry

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Question - Work-paper Entries-Sales of Services

P Company owns 80% of the outstanding stock of S Company. The 2020 sales of S Company included revenue of $390,000 consisting of consulting services billed to P Company at cost plus 30%. P Company was billed the full $390,000; of this amount, $260,000 was charged to selling expenses and $130,000 was charged to administrative expense.

Required: Prepare in general journal form the workpaper entry necessary to eliminate the effects of intercompany sales of services in the consolidated financial statements workpaper for the year ended December 31, 2020.

Reference no: EM132435878

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