Lilo Plc Sells Inventory Items to Its Subsidiary Stitch Plc

question 2

Multiple Choice

Lilo Plc sells inventory items to its subsidiary Stitch Plc.If during the financial year 2013,the unrealised profits in ending inventory in Stitch Plc exceeds that of its unrealised profits in beginning inventory,which of the following statements is correct with respect to Lilo Plc's consolidated financial statements after considering these transactions only?

• A)Consolidated profit will decrease.
• B)Consolidated deferred tax liability will increase.
• C)Consolidated ending inventory will decrease.
• D)Consolidated sales will be unaffected.

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Impose Will

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