Wagner Ltd Owns 100% of Korngold Ltd $\quad$ Credit Inventory
C) Debit Opening Retained Profits

Multiple Choice

Wagner Ltd owns 100% of Korngold Ltd.For the year ended 30 April 20X1, Korngold Ltd reported a profit of $1 million.On 30 April 20X0, Korngold Ltd had sold inventory to Wagner Ltd for a $0.6 million profit.All of this inventory was sold by Wagner Ltd on 1 June 20X0.For the financial year ending in 20X3, what is the consolidation adjustment (if any) in the financial statements, as a result of the profit on this sale?

A) None, because all inventory was sold
B) Debit sales and cost of sales
$\quad$ Credit inventory
C) Debit opening retained profits
$\quad$ Credit inventory
D) Debit inventory
$\quad$ Credit cost of sales