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P Company owns 80% of S Company. S Company sells merchandise to P Company at 35% above cost. During 2020 such sales amounted to $600,000.

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P Company owns 80% of S Company. S Company sells merchandise to P Company at 35% above cost. During 2020 such sales amounted to $600,000. At the end of each year.P Company had sold 1/3 of inventory purchased from Sto third parties. Required: Prepare the journal entries for P and S. In addition, the workpaper entries necessary to eliminate the effects of the intercompany sales for 2020

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