During the Year Ended 30 June 20X7 a Subsidiary Entity

question 26

Essay

During the year ended 30 June 20X7 a subsidiary entity sold inventory to a parent entity for $30 000. The inventory had previously cost the subsidiary entity $24 000. By 30 June 20X7 the parent entity had sold 75% of the inventory to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at 30 June 20X8 is:

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Definitions:

Independent Internal Verification

The process of having internal procedures reviewed by parties within the organization who are independent of the process being evaluated.

Discrepancies

Differences or inconsistencies found in records, reports, or documents, usually requiring investigation or correction.

Pre-Announced Basis

A strategy or condition disclosed in advance, usually to provide stakeholders with time to prepare or adjust.

Misappropriation Of Assets

The unauthorized use or theft of a company's assets for personal gain.