Question: A subsidiary entity sold goods to its parent entity for $125 000. The inventories originally cost the subsidiary $100 000. At reporting date, the parent

  1. A subsidiary entity sold goods to its parent entity for $125 000. The inventories originally cost the subsidiary $100 000. At reporting date, the parent still held all of the inventories. Which of the following adjustments must be included as part of the consolidation entry to eliminate this transaction?

a. Cr Inventory $100 000

b. Cr Inventory $125 000

c. Dr Inventory $25 000

d. Dr Inventory $225 000

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