1) B330 Limited always sells inventory items to its subsidiary B380 Limited at a 40 percent markup on cost. During the 2017 financial year, the unrealised profit in opening inventory of B380 Limited exceeds that of its unrealised profit in closing inventory. Assuming the same tax rate for both 2016 and 2017 financial years, which of the following statements is correct with respect to B330 Limiteds consolidated financial statements after considering these transactions only?

A. Consolidated profit for the 2017 financial year will increase.

B. The retained earnings opening balance for the 2017financial year will increase.

C. Consolidated profit for the 2017 financial year will decrease.

D. Consolidated sales and purchases/cost of goods sold for the 2017 financial year will be unaffected.

Explain your answer detail

2) A747 Limited and A767 Limited are subsidiaries of one economic entity. Both A747 Limited and A767 Limited are both separate legal entities required to prepare their own financial statements. During the 2017 financial year, A747 Limited sold A767 Limited an amount of inventory which cost $1,000 for $2,000. At the end of the 2017 financial year, A767 Limited has 60 percent of that inventory still on hand and the rest has been sold to an entity outside the economic entity.

At what amount should the inventory remaining in A767 Limited be recorded in A767 Limiteds own financial statements?

A.$600

B. $800

C. $1,200

D.$2,000

Explain details and show calculation steps