Aladdin Plc Sells Inventory for a Profit to Its Subsidiary

question 7

Multiple Choice

Aladdin Plc sells inventory for a profit to its subsidiary Jasmine Plc to be used as machinery in Jasmine Plc's production process.The consolidation worksheet of Aladdin Plc with respect to this transaction only should ? not include:

• A)a debit to sales.
• B)a credit to cost of sales.
• C)a credit to inventories.
• D)a credit to machinery.

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Definitions:

Required Rate

The minimum return that investors expect to earn from an investment, influencing many financial decisions.

Discounted Payback

A capital budgeting method that calculates the time required to recoup the initial investment in present value terms.

Annual Cash Flows

The total amount of money that is transferred into and out of a business, project, or investment within a year.

Required Rate

The minimum return that investors expect to earn when they invest in a project, often used as the discount rate in capital budgeting.