P Corporation owns all of S Corporation's stock. Both corporations use the accrual method of accounting, and they file a consolidated tax return. S provides cleaning services to P. In so doing, S charges P $6,000 for the services and incurs $5,000 of expenses to provide them. Requirement How does this transaction affect the group's consolidated taxable income? the Because P and S file a consolidated tax return, the transaction is an intercompany transaction. The intercompany item is S's $ 1,000 profit from providing the clearning services, corresponding item is P's $ 6,000" cleaning service expense. recomputed corresponding item is the 5000 of expenses the group incurs when providing the intercompany services. Thus, the consolidated taxable income is by The