Blue Plc Sold Inventory Items (With a Cost of £90

question 45

Multiple Choice

Blue Plc sold inventory items (with a cost of £90 000) to its subsidiary Maroon Plc for £120 000.Half of the inventory items were sold by Maroon Plc to external parties before the financial year end.Ignoring taxes,which of the following statements is correct with respect to this transaction only?

• A)Consolidated sales will decrease by £60 000.
• B)Consolidated sales will decrease by £100 000.
• C)Consolidated profit will decrease by £15 000.
• D)Consolidated profit will decrease by £20 000.

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Definitions:

Mercury

A chemical element with symbol Hg and atomic number 80, known for being a liquid metal at room temperature and for its toxicity.

Room Temperature

The ambient temperature of a room, generally considered to be between 20 to 25 degrees Celsius (68 to 77 degrees Fahrenheit).

Sodium Sulfate

An inorganic salt used in detergents, paper manufacturing, and glass production, known chemically as Na2SO4.

Atoms

Atoms are the basic units of matter and the defining structure of elements, consisting of a nucleus surrounded by electrons, and classified by the number of protons they contain.