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ABC Ltd sells inventory items to its subsidiary XYZ Ltd. If during the financial year 2020, the unrealised profits in ending inventory in XYZ Ltd

ABC Ltd sells inventory items to its subsidiary XYZ Ltd. If during the financial year 2020, the unrealised profits in ending inventory in XYZ Ltd is less than its unrealised profits in beginning inventory, which of the following statements is correct with respect to ABC Ltd's consolidated financial statements after considering these transactions only?

A.

Consolidated sales will be unaffected
B.

Consolidated profit will increase.
C.

Consolidated ending inventory will decrease
D.

Consolidated deferred tax liability will increase

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