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On 1 July 2018, Parent Ltd acquired all the shares of Son Ltd (T2) On 1 March 2019, Son Ltd sold inventory costing $12,000 to

On 1 July 2018, Parent Ltd acquired all the shares of Son Ltd
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(T2) On 1 March 2019, Son Ltd sold inventory costing $12,000 to Parent Ltd for $16,000. On 1 October 2019, Parent Ltd sold half of these inventory items back to Son Ltd for $6,000. Of the remaining inventory kept by Parent Ltd, half was sold in March 2020 to Dingo Ltd at a profit of $400. c) The adjusting consolidation entries at 30 June 2019 for the last intragroup transaction (T2) is provided below. Dr 16 000 Sales revenue Cost of sales Inventory Cr Cr 12 000 4 000 Deferred tax asset (30%) Income tax expense Dr1200 Cr 1 200 Explain why the above entries are made for the intragroup transaction (T2) as at 30 June 2019, noting the adjustments to each account separately

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