On May 31, 2005, Portland Street Branch (the only branch) of Trapp Company reported a net income of $80,000 for May 2005, and a $240,000 ending inventory at billed price of merchandise received from the home office at a 25% markup on billed price. Prior to adjustment, the May 31, 2005, balance of the home office’s Allowance for Overvaluation of Inventories: Portland Street Branch was $200,000 credit.
Prepare journal entries (omit explanations) on May 31, 2005, for the home office of Trapp Company to reflect the foregoing facts.