[thuygiang1007]

Hi Mr,

C is the official answer. I have just asked you the same question in the below post but it is closed.

Then i just want to make clear: in exam, if asked to consolidate, what should I do with 48,000$? ( CR group inventory or CR investment in associate?)

https://opentuition.com/topic/consolidation-of-associate-unrealized-profit-in-the-stock/

[thuygiang1007]

Hi Mr ,

For unrealised profit of sales between Associate and parent, i supposed it does not affect inventory. For this case, the treatment is:

DR group retained earning 48,000
CR Investment in associate 48,000

If we CR inventory 48,000, then will this make the Balance sheet un balanced? Because now, all Group retained earning, investment in associate, inventory are reduced by 48,000z.

Many thanks

[Author]

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