Parent company sold merchandise to its subsidiary. The subsidiary sold the merchandise to outside customers. Which of the following is NOT an effect of the working paper entries for the intercompany sales of merchandise by the parent company to its subsidiary?

a They eliminate the subsidiarys cost of intercompany purchases.

b They eliminate the overstatement of the subsidiarys sales

c They reduce inventories to the cost incurred by the consolidated entity.

d They eliminate the parents intercompany sales.