FR bpp revision kit Need help on page 84 no 255

Janvis Co owns 30% of McLintock Co. During the year to 31 December 20X4 McLintock Co sold $2 mm
of goods to Jarvis Co, of which 40% were still held in inventory by Jarvis at the year end. McLintoCK
applies a mark-up of 25% on all goods sold.

What effect would the above transactions have on group inventory at 31 December 20X4?
Debit group inventory $48,000
Debit group inventory $160,000
Credit group inventory $48,000
No effect on group inventory

Answer
No effect on group inventory
The transaction will be posted as:
Debit
Credit
Share of profit of associate
Investment in associate.
No effect on group inventory

According to the notes I copied from your lecture when associate sells to parent I should Dr group retained earnings and Cr group inventory.