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MC Question 10

A parent company sells goods to its 80% owned subsidiary during the financial year, some of which remains in inventory at the year end.

What is the adjustment required in the consolidated statement of financial position to eliminate any unrealised profit in inventory?

ADEBITGroup retained earnings
CREDITInventory
BDEBITGroup retained earnings
DEBITNon-controlling interest
CREDITInventory
CDEBITGroup Inventory
CREDITGroup retained earnings
DDEBITInventory
CREDITGroup retained earnings
CREDITNon-controlling interest