During the Current Period, a Subsidiary Entity Sold Inventories to Its

Multiple Choice

During the current period, a subsidiary entity sold inventories 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 inventories were 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.