Belgium Plc owns all the issued capital of Chocolate Plc.During the period ended 30 June 2015,Belgium Ltd sold Chocolate Plc inventory that had a cost of €200 000 for €270 000.At the end of the current period Chocolate Plc had 75% of that inventory still on hand; the rest was sold to entities external to the group.During the previous period Chocolate Ltd had sold inventory to Belgium Plc at a profit of €49 000.At the end of that period (30 June 2014)Belgium Plc still had 40% of that inventory on hand.That entire inventory was sold to parties external to the group during the current year.The taxation rate is 30% and both companies use a perpetual inventory system. What consolidation journal entries are required to eliminate the effects of these transactions for the period ended 30 June 2015?
A)

\begin{array} { | c | l | r | r | } \hline \text { Dr } & \text { Sales } & 270000 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 270000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Cost of goods sold } & 52500 & \\\hline \mathrm { Cr } & \text { Purchases } & & 52500 \\\hline & & & \\\hline \mathrm { Dr } & \text { Income tax expense } & 17750 & \\\hline \mathrm { Cr } & \text { Deferred income tax asset } & & 17750 \\\hline & & & \\\hline \mathrm { Dr } & \text { Inventory } & 19600 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 19600 \\\hline & & & \\\hline \mathrm { Dr } & \text { Income tax expense } & 5880 & \\\hline \mathrm { Cr } & \text { Deferred income tax asset } & & 5880 \\\hline\end{array}

\begin{array} { | c | l | r | r | } \hline \text { Dr } & \text { Sales } & 270000 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 270000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Cost of goods sold } & 17500 & \\\hline \mathrm { Cr } & \text { Purchases } & & 17500 \\\hline & & & \\\hline \mathrm { Dr } & \text { Income tax expense } & 5250 & \\\hline \mathrm { Cr } & \text { Deferred income tax asset } & & 5250 \\\hline & & & \\\hline \mathrm { Dr } & \text { Purchases } & 29400 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 29400 \\\hline & & & \\\hline \mathrm { Dr } & \text { Income tax expense } & 8820 & \\\hline \mathrm { Cr } & \text { Deferred income tax asset } & & 8820 \\\hline\end{array}

\begin{array} { | c | l | r | r | } \hline \text { Dr } & \text { Sales } & 270000 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 270000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Cost of goods sold } & 17500 & \\\hline \mathrm { Cr } & \text { Purchases } & & 17500 \\\hline & & & \\\hline \mathrm { Dr } & \text { Income tax expense } & 5250 & \\\hline \mathrm { Cr } & \text { Deferred income tax asset } & & 5250 \\\hline & & & \\\hline \mathrm { Dr } & \text { Opening retained earnings } & 49000 & \\\hline \mathrm { Cr } & \text { Closing retained earnings } & & 49000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Purchases } & 29400 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 29400 \\\hline & & & \\\hline \mathrm { Dr } & \text { Income tax expense } & 8820 & \\\hline \mathrm { Cr } & \text { Deferred income tax asset } & & 8820 \\\hline\end{array}

\begin{array} { | c | l | r | r | } \hline \mathrm { Dr } & \text { Sales } & 270000 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 270000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Cost of goods sold } & 52500 & \\\hline \mathrm { Cr } & \text { Inventory } & & 52500 \\\hline & & & \\\hline \mathrm { Dr } & \text { Deferred income tax asset } & 15750 & \\\hline \mathrm { Cr } & \text { Income tax expense } & & 15750 \\\hline & & & \\\hline \mathrm { Dr } & \text { Opening retained earnings } & 19600 & \\\hline \mathrm { Cr } & \text { Cost of goods sold } & & 19600 \\\hline & & & \\\hline \mathrm { Dr } & \text { Income tax expense } & 5880 & \\\hline \mathrm { Cr } & \text { Opening retained earnings } & & 5880 \\\hline\end{array}

Aladdin Plc Sells Inventory for a Profit to Its Subsidiary

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