Intercompany Service Transactions

PF Consolidated Inc. provided consulting services to its subsidiary, Sessions Athletic Gear, during 2017. PF Consolidated charged $6,000,000 of travel, salary, overhead and supplies costs to its administrative expenses account, and charged Sessions $9,000,000 for the services. By December 31, 207, the end of PFs accounting year. Sessions has paid all but $500,000 of the balance ddue to PF. Sessions categorizes the service as administrative.

Required

a. What balances appear in the December 31, 2017, trial balance of PF and Sessions with respect to these intercompany services? What balances should appear on the consolidated financial statements?

b. Prepare the working paper eliminating entries needed for these intercompany services at December 31, 2017.