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al entries for elimination of intragroup sales?

al entries for elimination of intragroup sales?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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S Ltd(a partially owned subsidiary), sold inventories for the first time to its parent, P Itd during the reporting period ended 28 February 2015, at a profit mark up of 25% on cost price. On 28 February 2015 inventories to the value of R100 000 (at cost to P Ltd) were still on hand. The company tax rate is 28%. Total sales from S Ltd to P Ltd for the current reporting period amounted to R200 000. What are the correct journal entries for elimination of intragroup sales? Select one: O a. Dr Cost of sales R200 000(P), Cr Revenue(S) P/L R200 000 O b. Dr Revenue(S) (P/L) R200 000, Cr Cost of sales(P) R200 000 O . Dr Revenue(S)P/L R100 000, Cr Cost of sales(P) R100 000 O d. Dr Revenue(P) P/L R200 000 Cr Cost of sales(P)R200 000
Transcribed Image Text:S Ltd(a partially owned subsidiary), sold inventories for the first time to its parent, P Itd during the reporting period ended 28 February 2015, at a profit mark up of 25% on cost price. On 28 February 2015 inventories to the value of R100 000 (at cost to P Ltd) were still on hand. The company tax rate is 28%. Total sales from S Ltd to P Ltd for the current reporting period amounted to R200 000. What are the correct journal entries for elimination of intragroup sales? Select one: O a. Dr Cost of sales R200 000(P), Cr Revenue(S) P/L R200 000 O b. Dr Revenue(S) (P/L) R200 000, Cr Cost of sales(P) R200 000 O . Dr Revenue(S)P/L R100 000, Cr Cost of sales(P) R100 000 O d. Dr Revenue(P) P/L R200 000 Cr Cost of sales(P)R200 000
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