A Subsidiary Entity Sold Inventory to Its Parent Entity at a Profit

Multiple Choice

A subsidiary entity sold inventory to its parent entity at a profit of $8 000.The goods had originally cost the subsidiary $20 000.At the end of the year all the inventory was still on hand.The adjustment entry to deal with this transaction on consolidation would include the following line item:

A) CR Cost of sales $28 000
B) CR Cost of sales $20 000
C) CR Cost of sales $12 000
D) CR Cost of sales $8 000.