The working paper elimination (in journal entry format) for a second year of intercompany sales made at a markup over subsidiary cost by a partially owned subsidiary to the parent company includes:

Question

Quizplus · Accepted Answer

In the second year, the unrealized profit from intercompany sales in the previous year is realized, requiring an adjustment to Retained Earnings of the subsidiary to eliminate the effect of the intercompany profit that was deferred in the first year.

The Working Paper Elimination (In Journal Entry Format) for a Second