Perkins Company owns 80% of Sheraton Company. Perkins Company sells merchandise to Sheraton Company @ 25% above cost. During 2016 & 2017, such sales amounted to $240,000 and $300,000 respectively. At the end of each year, Sheraton Company had 20% of the goods purchased that year from Perkins Company in its ending inventory. There were no intercompany sales prior to 2016.

Required: Prepare the workpaper entries necessary to eliminate the effects of the intercompany sales for 2016 and 2017.