1. During the current period, a subsidiary entity sold inventories to a parent entity for $40 000. The inventories had previously cost the subsidiary entity $36 000. By reporting date the parent entity had sold 75% of inventories to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at reporting date is: a. Sales revenue Cost of sales Inventories Deferred tax asset Income tax expense d. Sales revenue Cost of sales Inventories Deferred tax asset Income tax expense Sales revenue Cost of sales Inventories Deferred tax asset Income tax expense Sales revenue Cost of sales Inventories Deferred tax asset 40 000 36.000 4.000 1200 1200 Dr 40 000 39.000 1000 300 300 Dr Income tax expense 30 000 27.000 3.000 900 900 10 000 9.000 1.000 300 300