Alice Ltd Sold Inventory Items to Its Subsidiary Mad Hatter

Multiple Choice

Alice Ltd sold inventory items to its subsidiary Mad Hatter Ltd and had the following intercompany transactions: Cost of $100 000 for $125 000 for the year ended 30 June 2012.Half of the inventory items were sold by Mad Hatter Ltd to external parties before the financial year end 30 June 2012.
Cost of $75 000 for $100 000 for the year ended 30 June 2013.Half of the inventory items were sold by Mad Hatter Ltd to external parties before the financial year end 30 June 2013.
Ignoring taxes,which of the following statements is correct with respect to this transaction only for the year ended 30 June 2013?

A) Consolidated sales will decrease by $125 000.
B) Consolidated sales will increase by $25 000.
C) Consolidated profit will decrease by $12 500.
D) Consolidated profit will increase by $12 000
E) No change in the consolidated profit.