Tanton plc is the parent company of Ruckus plc. Tanton sold its inventory to Ruckus for a price of £14,000. Tanton had held such inventory on its statement of financial position at a cost of £10,000. By the end of the financial year, Ruckus still held £2,800 of that inventory on its statement of financial position. How much unrealised profit should be cancelled on consolidation? a. Zero b. £400 c. £800 d. £2,800 e. £4,000

Tanton plc is the parent company of Ruckus plc. Tanton sold its inventory to Ruckus for a price of £14,000. Tanton had held such inventory on its statement of financial position at a cost of £10,000. By the end of the financial year, Ruckus still held £2,800 of that inventory on its statement of financial position. How much unrealised profit should be cancelled on consolidation? a. Zero b. £400 c. £800 d. £2,800 e. £4,000

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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Question

How much unrealised profit should be cancelled on consolidation?

Zero

£400

£800

£2,800

£4,000

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