A subsidiary sold inventories to its parent entity in the year ended 30 June 2022 at a profit of $8 000. At 30 June 2022 the parent had not sold the inventories. The company tax rate is 30%. The consolidation worksheet prepared at 30 June 2022 will contain the following adjustment entry for inventories:
A) CR Inventories $2 400.
B) DR Inventories $2 400.
C) DR Inventories $8 000.
D) CR Inventories $8 000.

Question

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The Answer of A subsidiary sold inventories to its parent entity in the year ended 30 June 2022 at a profit of $8 000. At 30 June 2022 the parent had not sold the inventories. The company tax rate is 30%. The consolidation worksheet prepared at 30 June 2022 will contain the following adjustment entry for inventories:
A) CR Inventories $2 400.
B) DR Inventories $2 400.
C) DR Inventories $8 000.
D) CR Inventories $8 000.

A Subsidiary Sold Inventories to Its Parent Entity in the Year