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Q: How will be provision for unrealised profit be calculated?
if a parent company have owned 80% of subsidery , parent made sales to subsidery costing $80,000 for $100,000, at the end of the period subsidery have still 50% of good left in inventory.
please solve with full working, it will be appreciated sir.
Thanks !The inventory remaining cost $40,000 (50% x 80,000) and had been sold to the subsidiary for $50,000 )50% x 100,000), and so the unrealised profit is $10,000 !
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