On Jan 1, 2013, May Company acquired 100% of the common stock of Next company. During 2013 and 2014, May has appropriately accounted for its investment in Next using the partial equity method.

During 2013, Next sold merchandise to May for $250,000, of which $55,000 is held by May on Dec 31, 2013. Next's gross profit on all sales is 20%. During 2014, May sold merchandise to Next for $270,000 with a 35% markup over cost. At the end of 2014, Next had half of the goods purchased that year from May in its ending inventory.

Prepare in general journal form all entries necessary on the consolidated statements work-papers to eliminate the effects of the inter-company sales for 2013.

Prepare in general journal form all entries necessary on the consolidated statements work-papers to eliminate the effects of the inter-company sales for 2013.