A subsidiary entity sold inventory to a parent entity for $30 000. The inventory had previously cost the subsidiary entity $24 000. By reporting date, the parent entity had sold 75% of the inventory to a party outside the group. The company tax rate is 30%. The adjustment entry in the consolidation worksheet at reporting date is:

Question 6 options:

a)

Sales revenue

Dr

30 000

Cost of sales

Cr

24 000

Inventory

Cr

6 000

Deferred tax asset

Dr

1 800

Income tax expense

Cr

1 800

b)

Sales revenue

Dr

30 000

Cost of sales

Cr

28 500

Inventory

Cr

1 500

Deferred tax asset

Dr

450

Income tax expense

Cr

450

c)

Sales revenue

Dr

22 500

Cost of sales

Cr

18 000

Inventory

Cr

4 500

Deferred tax asset

Dr

1 350

Income tax expense

Cr

1 350

d)

Sales revenue

Dr

7 500

Cost of sales

Cr

6 000

Inventory

Cr

1 500

Deferred tax asset

Dr

450

Income tax expense

Cr

450