Question
City Ltd sold an item of machinery to its subsidiary West Ltd on 1 April 2017 for $100 000. The asset had cost City Ltd
City Ltd sold an item of machinery to its subsidiary West Ltd on 1 April 2017 for $100 000. The asset had cost City Ltd $80 000 when acquired on 1 April 2016. At that time the remaining useful life of the machinery was assessed at 6 years. The adjustment necessary on consolidation as at 30 June 2019 in relation to the sale of Machinery will result in:
Select one:
A decrease in retained earnings and an increase in current year profit
an increase in retained earnings and a decrease in current year profit
a decrease in retained earnings and a decrease in current year profit
an increase in retained earnings and an increase in current year profit
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