On January 1,20X3,Dwayne Ltd

question 17

Multiple Choice

On January 1,20X3,Dwayne Ltd.formed Carlos Co. ,a 100% owned subsidiary.During 20X6,Dwayne sold Carlos $100,000 in goods.The unrealized profit in Carlos' inventories was $20,000 at December 31,20X5 and $25,000 at December 31,20X6.Ignoring income taxes,what adjustment should be made to the consolidated financial statements for the year ended December 31,20X6 to reflect the unrealized profit in Carlos' ending inventory?

• A)Inventory at December 31,20X6 will be increased by $25,000.
• B)Cost of goods sold for 20X6 will be decreased by $25,000.
• C)Retained earnings at the end of 20X6 will be decreased by $25,000.
• D)Retained earnings at the end of 20X6 will be decreased by $5,000.

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Definitions:

Rainfall

Precipitation in the form of water droplets that falls from clouds and is a crucial part of the water cycle sustaining ecosystems and human activities.

Hydrograph

A graph showing the change in the amount of flowing water (discharge) over time.

Steeper Slopes

Areas of land where the gradient is more inclined relative to the horizontal plane, increasing the rate of runoff.

Urbanization

Urbanization is the process by which towns and cities are formed and become larger as more people begin living and working in central areas.