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A Parent company sells goods to its 100% owned subsidiary for 100,000 during the financial year, half of which have ben resold by the subsidiary

A Parent company sells goods to its 100% owned subsidiary for 100,000 during the financial year, half of which have ben resold by the subsidiary and half remain in the inventory of the subsidiary at the year end. The cost of these goods had been 60,000 to the parent.

What is the adjustment required while preparing the consolidated statement of financial position?

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The inventory should be increased by 20,000.

The inventory should be increased by 40,000.

The inventory should be decreased by 20,000

The inventory should be decreased by 40,000.

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