On 16 May 2020, Lourve Ltd sold equipment to its subsidiary, Godivae Ltd, for $130 000, this equipment having a carrying amount at time of sale of $110 000. The equipment was regarded by Lourve Ltd as a depreciable non-current asset, being depreciated at 10% p.a. on cost, whereas Godivae Ltd records the equipment as inventory. The asset was sold by Godivae Ltd before 30 June 2020. The worksheet entry for the year ended 30 June 2020 would include which of the following adjustments?

Group of answer choices

Dr. Cost of sales 20 000

Cr. Income tax expense 6 000

Dr. Deferred tax assets 6 000

Cr. Inventories 20 000

Dr. Income tax expense 6 000

Cr. Equipment 20 000

Dr. Income tax expense 6 000

Cr. Cost of sales 20 000

Answer rating: 100% (QA)

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