As well as its investment in T (see question 8) S also held 75% of the shares of U. U sells goods to S. During the year ending 31 March 20X4, U sells goods to S for $100 000. The cost of the goods to U is $80 000. At the yearend S"s inventories include $16 000 of goods purchased from U.
Calculate the adjustment required in respect of unrealized profit, and describe the accounting treatment of the adjustment in the consolidated statement of comprehensive income and the consolidated statement of financial position.