Tammam Ltd Is the Parent of Shud Ltd B) $\begin{array}{llcc} \text { Sales} & 17500 \\ \text { Cost of sales } &&17500\\ \end{array}$

question 9

Multiple Choice

Tammam Ltd is the parent of Shud Ltd.On 1 January 20X3 Tammam sold inventory to Shud for $20 000.The profit margin on this inventory was $5 000.As of end of financial year, June 30, Shud still held half of this inventory.
Which is the correct set of consolidation elimination entries for June 30 20X3 in respect of the inventory?

• A)\(\begin{array}{lrr}
• \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\
• \text { Sales } & 20000 & \\
• \text { Cost of sales } & & 20000 \\
• \text { Cost of sales } & 2500 & \\
• \text { Inventory } & &2500
• \end{array}\)
• B)\(\begin{array}{llcc}
• \text { Sales} & 17500 \\
• \text { Cost of sales } &&17500\\
• \end{array}\)
• C)\(\begin{array}{llcc}
• \text { Sales} & 20000 \\
• \text { Cost of sales } &&20000\\
• \end{array}\)
• D)\(\begin{array} { l r l }
• \text { Sales } & 20000 \\
• \text { Impairment expense-inventor } &&2 5000 \\
• \text { Cost of sales } & & 225000
• \end{array}\)

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