On 5 June 2022, a parent entity sold inventories to a subsidiary entity for $80. Theinventories had previously cost the parent entity $72. All the inventories are still heldby the subsidiary at reporting date, 30 June 2022. Ignoring tax effects, theadjustment entry in the consolidation worksheet at reporting date is:a. Sales revenueO b.OC.Cost of salesInventoriesCashSales revenueCost of salesInventoriesSales revenueCost of salesInventoriesd. Sales revenueCashInventoriesCost of salesDrÄ ÄÄ Ä ÄJÄJCrCrDrCrDrCrDrCrCrDrCrDrCr80 00072 00072 00080 00072 00072 0008 00072 00072 00072 00072 0008 00072 00072 000

Solution Adjustment entries are necessary to update all the accounts balances before preparing…

On 5 June 2022, a parent entity sold inventories to a subsidiary entity for $80. The inventories had previously cost the parent entity $72. All the inventories are still held by the subsidiary at reporting date, 30 June 2022. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is: a. O b. C. Sales revenue Cost of sales Inventories Cash Sales revenue Cost of sales Inventories Sales revenue Cost of sales Inventories d. Sales revenue Cash Inventories Cost of sales Dr Cr Cr Dr Cr Dr Cr Dr Cr Cr Dr Cr Dr Cr 80 000 72 000 72 000 80 000 72 000 72 000 8 000 72 000 72 000 72 000 72 000 8 000 72 000 72 000

On 5 June 2022, a parent entity sold inventories to a subsidiary entity for $80. The inventories had previously cost the parent entity $72. All the inventories are still held by the subsidiary at reporting date, 30 June 2022. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is: a. O b. C. Sales revenue Cost of sales Inventories Cash Sales revenue Cost of sales Inventories Sales revenue Cost of sales Inventories d. Sales revenue Cash Inventories Cost of sales Dr Cr Cr Dr Cr Dr Cr Dr Cr Cr Dr Cr Dr Cr 80 000 72 000 72 000 80 000 72 000 72 000 8 000 72 000 72 000 72 000 72 000 8 000 72 000 72 000

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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