Aladdin Plc sold inventory items (with a cost of £100 000)to its subsidiary Genie Plc for £120 000.Half of the inventory items were sold by Genie Plc to external parties before the financial year end.Ignoring taxes,which of the following statements is correct with respect to this transaction only?

Question

Quizplus · Accepted Answer

The unrealized profit on the unsold inventory (half of £20,000 profit) is £10,000, which needs to be eliminated from the consolidated profit.

Aladdin Plc Sold Inventory Items (With a Cost of £100