$4-$S$2/$ Welcome Message $/$ Assessment $2$

The correct journal entry to eliminate the unrealised profit included in the opening inventory is:

Retained earnings $-$ Lex Ltd$.q,$

$($R$1200000\frac{20}{120}$

Cost of sales $-$ E$-$Volvo Ltd $q,$

$($R$1200000\frac{20}{120}$

${?}^2$ Cost of sales $-$ Lex Ltd $q,$

$($R$870000\frac{20}{120}$

Inventory E$-$Volvo Ltd$.q,$

$($R$870000\frac{20}{120}$

Retained earnings $-$ Lex Ltd$.q,$

Cost of sales $-$ Lex Ltd$.q,$

$($R$1200000\frac{20}{120}$

$($R$1200000\frac{20}{120}$

Retained earnings $-$ E$-$Volvo Ltd$.q,$

Inventory$-$Lex Ltd $$

$($R$1200000\frac{20}{120}$

$($R$1200000\frac{20}{120})$