A subsidiary sold inventory to its parent in year 1 at a before-tax profit of $15 000.At balance sheet date,the parent had not sold the inventory to an external party.The company tax rate is 30%.The year 1 consolidation worksheet will contain which of the following adjustment entries for inventory?
A)Dr Inventory $15 000
B)Dr Inventory $10 500
C)Cr Inventory $15 000
D)Cr Inventory $10 500

Question

Quizplus · Accepted Answer

The Answer of A subsidiary sold inventory to its parent in year 1 at a before-tax profit of $15 000.At balance sheet date,the parent had not sold the inventory to an external party.The company tax rate is 30%.The year 1 consolidation worksheet will contain which of the following adjustment entries for inventory?
A)Dr Inventory $15 000
B)Dr Inventory $10 500
C)Cr Inventory $15 000
D)Cr Inventory $10 500

A Subsidiary Sold Inventory to Its Parent in Year 1