The Journal Entries to Eliminate Unrealised Profit in Closing Inventory

question 55

Multiple Choice

The journal entries to eliminate unrealised profit in closing inventory at 30 June 2014 were as follows: $$\begin{array} { | l | r | r | } \hline 30 \text { June } 2014 & & \\\hline \text { Dr Cost of goods sold } & 50000 & \\\hline \text { Cr Inventory } & & 50000 \\\hline & & \\\hline \text { Dr Deferred tax asset } & 15000 & \\\hline \text { Cr Income tax expense } & & 15000 \\\hline\end{array}$$ What are the journal entries to eliminate the unrealised profits in opening inventory the following period?

• A)
• \[\begin{array} { | l | r | r | }
• \hline \text { 1 July } 2014 & & \\
• \hline \text { Dr Cost of goods sold } & 50000 & \\
• \hline \text { Cr Inventory } & & 50000 \\
• \hline & & \\
• \hline \text { Dr Deferred tax asset } & 15000 & \\
• \hline \text { Cr Income tax expense } & & 15000 \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | l | r | r | }
• \hline \text { 1 July } 2014 & & \\
• \hline \text { Dr Opening retained earnings (1 July 2014) } & 50000 & \\
• \hline \text { Cr Cost of goods sold } & & 50000 \\
• \hline & & \\
• \hline \text { Dr Deferred tax asset } & 15000 & \\
• \hline \text { Cr Opening retained earnings (1 July 2014) } & & 15000 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | r | r | }
• \hline \text { 1 July } 2014 & & \\
• \hline \text { Dr Opening retained earnings (1 July 2014) } & 50000 & \\
• \hline \text { Cr Inventory } & & 50000 \\
• \hline & & \\
• \hline \text { Dr Deferred tax asset } & 15000 & \\
• \hline \text { Dr Opening retained earnings (1 July 2014) } & & 15000 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | l | r | r | }
• \hline \text { 1 July } 2014 & & \\
• \hline \text { Dr Opening retained earnings (1 July 2014) } & 50000 & \\
• \hline \text { Cr Cost of goods sold } & & 50000 \\
• \hline & & \\
• \hline \text { Dr Income tax expense } & 15000 & \\
• \hline \text { Cr Opening retained earnings (1 July 2014) } & & 15000 \\
• \hline
• \end{array}\]

Examine the Uniform Commercial Code’s (UCC) definitions and treatment of merchants compared to non-merchants.

Determine when and how risk of loss transfers in sales transactions depending on contract specifics.

Interpret the enforceability of verbal contracts and the significance of written confirmations under the UCC and CISG.

Understand and apply order of operations in mathematical expressions.

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Definitions:

Meeting Productivity

Refers to the effectiveness and efficiency of a meeting in achieving its objectives.

Meeting Minutes

The written record of the discussions, decisions, and actions taken during a meeting, typically kept for future reference.

Virtual Meetings

Online gatherings where participants use video conferencing software to communicate from different locations.

Reduced Cost

A decrease in expenses or outlays for a business, project, or activity, often achieved through efficiency improvements or budget cuts.