Question
On 1 June 2020, Sam Ltd acquired all the shares in Sato Ltd. At the date of acquisition, all the identifiable net assets of Sato
On 1 June 2020, Sam Ltd acquired all the shares in Sato Ltd. At the date of acquisition, all the identifiable net assets of Sato Ltd were at fair value except for inventory which was recorded by the subsidiary at $50,000. The fair value of the inventory was $85,000 at the date of acquisition. The inventory was sold on 1 October 2020 for $80,000. The consolidation entry required on 30 June 2021 is:
Group of answer choices
No consolidation entries are required
Dr Retained earnings $24,500; Cr FVA $24,500
Dr COGS $35,000; Cr FVA $24,500; Cr ITE $10,500
Dr Inventory $35,000; Cr FVA $24,500; Cr DTL $10,500
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