A 90% owned subsidiary sold merchandise at a profit to its parent company near the end of 2013.Under the partial equity method, the workpaper entry in 2014 to recognize the intercompany profit in beginning inventory realized during 2014 includes a debit to

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The intercompany profit is recognized in the beginning inventory of the parent company in 2014. The entry to record this includes a debit to Cost of Sales and a credit to Retained Earnings - P. The noncontrolling interest is not affected by this entry.

A 90% Owned Subsidiary Sold Merchandise at a Profit to Its