On 5 June 2022 , a parent entity sold inventories to a subsidiary entity for $80. The inventories had previously cost the parent entity $72. All the inventories are still held by the subsidiary at reporting date, 30 June 2022. Ignoring tax effects, the adjustment entry in the consolidation worksheet at reporting date is: Purple Ltd sold an item of plant to its subsidiary, Rain Ltd, on 1 January 2022 for $50000. The asset had cost Purple Ltd $60000 and had an useful life of 6 years when acquired on 1 January 2020 from an external party. The adjustment necessary on consolidation in relation to the transfer of plant as at 30 June 2022 will result in: a. a decrease in current year profit and non-current assets. b. an increase in current year profit and non-current assets. c. a decrease in current year profit. d. an increase in current year profit. On 1 July 2021 , Xavier Ltd rents a warehouse for one year from its subsidiary, Gabrielle Ltd, for $60000. The company tax rate is 30%. The consolidation adjustment entry needed at 30 June 2023 is: d. No entry is required at 30 June 2023. A subsidiary sold inventories to its parent entity in the year ended 30 June 2022 at a profit of $8000. At 30 June 2022 the parent had not sold the inventories. The company tax rate is 30%. The consolidation worksheet prepared at 30 June 2022 will contain the following adjustment entry for inventories: a. CR Inventories $2400. b. DR Inventories $8 c. DR Inventories $2400. d. CR Inventories $8 During the current period, a subsidiary entity sold inventories to its parent entity at a profit of $6000. The goods had originally cost the subsidiary $30. All the inventories were still on hand at the end of the year. The consolidation adjustment entry would include the following line item: a. CR Inventories \$24. b. CR Inventories $30. c. CR Inventories $6. d. CR Inventories $18. The realisation of the profit or loss on a depreciable asset transferred within the group: a. is assumed to occur when the future benefits embodied in the asset are consumed by the group. b. results in an inconsistent pattern with the allocation of depreciation of the asset. c. is assumed to occur only when an external entity becomes directly involved with the asset. d. occurs only when the asset is sold to an external party. The realisation of the profit or loss on a depreciable asset transferred within the group: a. is assumed to occur when the future benefits embodied in the asset are consumed by the group. b. results in an inconsistent pattern with the allocation of depreciation of the asset. c. is assumed to occur only when an external entity becomes directly involved with the asset. d. occurs only when the asset is sold to an external party. A parent entity group sold a depreciable non-current asset to a subsidiary entity for $5300. The asset originally cost $7000 when acquired from an external party and at the date of the intragroup sale the accumulated depreciation was $2200. The amount of the unrealised gain on the intragroup sale to be eliminated is: a. $2200. b. $5300. c. $4800. d. $500. On 1 July 2021 , Zoe Ltd sold equipment to its subsidiary, Nate Ltd, for $80000. The equipment had a carrying amount at the time of sale of $70000. The equipment was depreciated by Zoe Ltd at 10% p.a. on cost, while Nate Ltd applies a rate of 8%. The consolidation worksheet entry for the year ended 30 June 2022 would include the following adjustment in relation to depreciation: a. DR Accumulated depreciation $800 CR Depreciation expense $800 b. DR Depreciation expense $800 CR Accumulated depreciation $800 c. DR Accumulated depreciation $1000 CR Depreciation expense $1000 d. DR Depreciation expense $1000 CR Accumulated depreciation $1000 Kateri Ltd sold an item of plant to its subsidiary, Patrick Ltd, on 1 January 2022 for $50 The asset had cost A Ltd $60 and had a useful life of 6 years when acquired on 1 January 2020 from an external party. The adjustment necessary on consolidation in relation to the transfer of plant as at 30 June 2023 will result in: a. an increase in retained earnings and a decrease in current year profit. b. an increase in retained earnings and an increase in current year profit. c. a decrease in retained earnings and an increase in current year profit. d. a decrease in retained earnings and a decrease in current year profit