A Subsidiary Sold Inventories to Its Parent Entity in the Year

Multiple Choice

A subsidiary sold inventories to its parent entity in the year ended 30 June 2022 at a profit of $8 000. At 30 June 2022 the parent had not sold the inventories. The company tax rate is 30%. The consolidation worksheet prepared at 30 June 2022 will contain the following adjustment entry for inventories:

A) CR Inventories $2 400.
B) DR Inventories $2 400.
C) DR Inventories $8 000.
D) CR Inventories $8 000.