Angelo Limited Sold Inventory to Its Parent Entity at a Profit

question 9

Multiple Choice

Angelo Limited sold inventory to its parent entity at a profit of $4 000. The inventory cost Angelo Limited $16 000. At the end of the reporting period the parent had sold 50% of the inventory to an external party. The consolidation adjustment entry (excluding tax effects) will eliminate unrealised profit amounting to:

• A) $2 000
• B) $4 000
• C) $12 000
• D) $16 000

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Definitions:

Evaluate

To examine or judge carefully, analyzing the value or condition of something in a detailed manner.

Personal Appearance

The way one dresses, grooms, and presents themselves physically to the outside world.

Self-Perception

An individual's awareness of and attitude towards their own character, feelings, motives, and desires.

Unrealistic Pessimistic

A tendency to expect the worst possible outcome in a situation, beyond a realistic appraisal of the actual risks or outcomes.