A Subsidiary Sold Inventory to Its Parent Entity in Year

question 28

Multiple Choice

A subsidiary sold inventory to its parent entity in Year 1 at a profit of $5000. At balance sheet date the parent had not sold the inventory. The company tax rate is 30%. The Year 1 consolidation worksheet will contain the following adjustment entry for inventory:

• A) DR Inventory $5 000
• B) DR Inventory $ 3 500
• C) CR Inventory $5 000
• D) CR Inventory $3 500

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Definitions:

Posterior Cavity

The back part of the body cavity that houses the brain and spinal cord in vertebrates, also known as the dorsal body cavity.

Astigmatism

A refractive error of the eye that causes distorted or blurred vision due to an irregular curvature of the cornea or lens.

Refractory Error

A visual impairment where the eye does not bend or refract light correctly, leading to blurred vision.

Intraocular Pressure

The fluid pressure inside the eye, essential for maintaining the eye's shape and proper optical function.