Sister Comapny Cost Book keeping

[seainside]

Hello all,
Two sister companies, one of them buys goods and delivers to the other.The other sells the goods with additional service and makes profit.
Is it possible the first company sells the goods to the sister company and record the transaction as a sale. Is there a way to record such transaction without falling into double costing?
For example,
Company A buys a product for USD 100.
Company A delivers the product to Company B and adds USD 5 (i.e. USD 105)
Company B sells the product at USD 140.

What will the accounting transaction look like from the point of view of each sister company, and also the consolidated level at the parent company?

Appreciate the thoughts and feedback.
Thank you

 

[kirby]

Co A buys Inventory -A's Books
DR Inventory 100
CR Cash 100

A sells to B - A's books
DR Cash 105
CR Intercompany sales 105
DR COGS 100
CR Inventory 100

B buys from A - B's books
Dr Inventory 105
CR Cash 105

B sells to 3rd party - Bs books
DR Cash 140
CR sales 140
DR COGS 105
CR Inventory 105

At this point you put these txns on a spreadsheet and add across to get these net amounts

CAsh 40DR
Sales 140CR
Interco Sales 105CR
COGS 205DR

Then the Parent company will have this elimination entry
DR Interco sales 105
CR COGS 105

and the consolidated numbers will be

Cash 40DR
Sales 140 CR
COGS 100DR