Belgium Ltd owns all the issued capital of Chocolate Ltd. During the period ended 30 June 2005 Belgium Ltd sold Chocolate Ltd inventory that had a cost of $200,000 for $270,000. At the end of the current period Chocolate Ltd had 75 per cent of that inventory still on hand; the rest was sold to entities external to the group. During the previous period Chocolate Ltd had sold inventory to Belgium Ltd at a profit of $49,000. At the end of that period (30 June 2004) Belgium Ltd still had 40 per cent of that inventory on hand. That entire inventory was sold to parties external to the group during the current year. The taxation rate is 30 per cent and both companies use a perpetual inventory system.
What consolidation journal entries are required to eliminate the effects of these transactions for the period ended 30 June 2005?
E) None of the given answers.

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The Answer of Belgium Ltd owns all the issued capital of Chocolate Ltd. During the period ended 30 June 2005 Belgium Ltd sold Chocolate Ltd inventory that had a cost of $200,000 for $270,000. At the end of the current period Chocolate Ltd had 75 per cent of that inventory still on hand; the rest was sold to entities external to the group. During the previous period Chocolate Ltd had sold inventory to Belgium Ltd at a profit of $49,000. At the end of that period (30 June 2004) Belgium Ltd still had 40 per cent of that inventory on hand. That entire inventory was sold to parties external to the group during the current year. The taxation rate is 30 per cent and both companies use a perpetual inventory system.
What consolidation journal entries are required to eliminate the effects of these transactions for the period ended 30 June 2005?
E) None of the given answers.

Belgium Ltd Owns All the Issued Capital of Chocolate Ltd