During the Current Period, a Subsidiary Entity Sold Inventories to Its

question 7

Multiple Choice

During the current period, a subsidiary entity sold inventories to its parent entity at a profit of $6 000. The goods had originally cost the subsidiary $14 000. At the end of the year all the inventories were still on hand. The adjustment entry to deal with this transaction on consolidation would include the following line item:

• A) CR Cost of sales $14 000.
• B) CR Cost of sales $20 000.
• C) CR Cost of sales $6 000.
• D) CR Cost of sales $8 000.