Parent Ltd (Parent) acquired 70% interest in Subsidiary Ltd (Subsidiary) on 1July 20X0. Duringthe financial year ended 30 June 20X1, Subsidiary sold inventory to Parent for 8.000 $. The originalcost to Subsidiary was 6000$. Half of the inventory was still on hand with Parent at 30 June 20X1.During the year ended 20 June 20X2, the remainder of the inventory was sold to parties external to thegroup. Assume a tax rate of 30%. Which of the following proforma journal entries would be processedin the consolidated worksheet for the financial year ended 30 june 20X2?

Parent Ltd (Parent) acquired 70% interest in Subsidiary Ltd (Subsidiary) on 1July 20X0. Duringthe financial year ended 30 June 20X1, Subsidiary sold inventory to Parent for 8.000 $. The originalcost to Subsidiary was 6000$. Half of the inventory was still on hand with Parent at 30 June 20X1.During the year ended 20 June 20X2, the remainder of the inventory was sold to parties external to thegroup. Assume a tax rate of 30%. Which of the following proforma journal entries would be processedin the consolidated worksheet for the financial year ended 30 june 20X2?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 38P

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