QUESTION 1 Not complete Points out of 28.00 Flag question Downstream Intercompany Merchandise Transactions Sketchy Shoes is a subsidiary of Pacific Brands. Pacific routinely sells merchandise to Sketchy at a 25% markup on cost. Information on intercompany merchandise transactions is below (in thousands Inventory balance on Sketchy's books, purchased from Pacific Brands, January 1, 2017 Inventory balance on Sketchy's books, purchased from Pacific Brands, December 31, 2017 Total sales revenue recorded by Pacific Brands on merchandise sales to Sketchy in 2017 8,750 9,275 350,000 Required a. Prepare the working paper eliminating entries related to these intercompany transactions at December 31, 2017. Consolidation Journal Description Debit Credit To eliminate intercompany profit from Sketchy's beginning inventory (I-2) To eliminate intercompany sales and purchases To eliminate intercompany profit from Sketchy's ending inventory