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4. P. CO owned 80% of S co., S sells merchandise to P at 25% above cost. During 2015 inter-company sales amounted to 240,000 and 300,000 respectively. At the end of both 2015 and 2016, P had 30% of the goods purchased that year from S in its ending inventory. There were no the sales prior to 2015. Prepare in general journal from all entries necessary on the consolidated statements work paper to eliminate the effects of the inter-company sales for each of 2015 and 2016. label the years.
4B. Referring to problem above, if P Co. had reported income of 450,000 each year and s. co. had reported income of 250,000 each year calculate the combined income for each year
4C. Again, referring to problem, if p. Co. had reported income of 450,000 and S co. has reported income 250,000 each year, and the sale had been on a downstream, calculate combines incomes for both year.
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