On 12 March 2021, parent entity Tall Ltd sold inventory to subsidiary entity Short Ltd for $70,000. The mark-up on sale was 25%. By 30 June 2021, 50% of the inventory had been sold to external customers for $75,000. The remaining inventory was sold during the year ending 30 June 2022. What consolidation adjusting entries, if any, would be required on 30 June 2022 for this intra-group transaction?

Group of answer choices

Dr Retained Earnings $8,000; Cr COGS $8,000

Dr Sales $70,000; Cr COGS $79,000; Cr Inventory $7,000

Dr Retained Earnings $7,000; Cr COGS $7,000

No consolidation entries are required as all the profit has become realized