Andronico Limited provided an advance of $500 000 to its subsidiary Galactico Limited. On consolidation, the following adjustment is needed in relation to this intragroup advance:

Question

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The intragroup advance made by Andronico Limited to its subsidiary Galactico Limited needs to be eliminated from the consolidated financial statements. The adjustment needed is to remove the advance from both the parent and subsidiary's balance sheets by crediting Advances to subsidiaries and debiting Advances from parent. Therefore, option B and D are incorrect as they result in incorrect accounting treatment, and option A is incorrect as an adjustment is needed. Option C correctly reflects the adjustment required in the consolidation process.

Andronico Limited Provided an Advance of $500 000 to Its