Workpaper Entries, Downstream Sales Perkins Company owns 85% of Sheraton Company. Perkins Company sells merchandise to Sheraton Company at 20% above cost. During 2004 and 2005, 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. LO5 Required:
Prepare the workpaper entries necessary to eliminate the effects of the intercompany sales for 2004 and 2005.»