On 10 June 2019, Afterpay Ltd acquired all the shares in Touchpay Ltd for $1,000,000. At the date of acquisition, all the net assets of Touchpay Ltd were at fair value except for inventory which was recorded by the subsidiary at $220,000. The fair value of the inventory was 380,000 at the date of acquisition.

The inventory was sold on 2 December 2019 for $360,000. The consolidation entry required at 30 June 2020 is:

a. No consolidation entries are required

b Dr COGS $160,000; Cr FVA $112,000; Cr ITE $48,000

c Dr Inventory $160,000; Cr FVA $112,000; Cr DTL $48,000

d Dr Retained earnings $112,000; Cr FVA $112,000