Penny Plc Sells Inventory Items to Its Subsidiary Bolt Plc

question 46

Multiple Choice

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

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

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Definitions:

Personalization

The process of tailoring a product, service, or content to an individual's specific needs, preferences, or interests.

Selective Thinking

A cognitive bias that involves focusing on evidence or information that supports one's beliefs while ignoring evidence that contradicts them.

Irrational Beliefs

Thoughts that are not logically consistent or not supported by evidence, often contributing to negative emotional states.

Albert Ellis

An American psychologist and psychotherapist who founded Rational Emotive Behavior Therapy (REBT), a form of cognitive-behavioral therapy focusing on identifying and changing irrational beliefs.