Exercise 6-1

P Company owns 80% of the outstanding stock of S Company. During 2014, S Company reported net income of $509,270 and declared no dividends. At the end of the year, S Companys inventory included $464,810 in unrealized profit on purchases from P Company. Intercompany sales for 2014 totaled $2,455,400. Prepare in general journal form all consolidated financial statement workpaper entries necessary at the end of the year to eliminate the effects of the 2014 intercompany sales. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To eliminate intercompany sales of 2014)
(To eliminate unrealized intercompany profit in inventory)