Question 17 (1 point)

Pitt Ltd sells inventories to Upper Ltd during the financial year ended 30 June 2027.

At 30 June 2027 50 per cent of this inventory remained unsold.

The inventories were held by Pitt Ltd at a value of $45 000 and were sold with an 80 per cent mark-up to Upper Ltd.

By 30 June 2028 all of this inventory is sold.

What is the consolidation adjustment for this inventory now when it is sold to external parties by Upper Ltd? Assume no tax.

Question 17 options:

a)

Dr	Retained earnings1 July 2028	45 000
Cr	Cost of goods sold		45 000

b)

Dr	Sales revenue	45 000
Cr	Cost of goods sold		45 000

c)

Dr	Sales revenue	18 000
Cr	Cost of goods sold		18 000

d)

Dr	Retained earnings1 July 2028	18 000
Cr	Cost of goods sold		18 000