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Harley Ltd owns 100% of Quinn Ltd.
To eliminate intragroup transactions for the year, Quinn Ltd's accountant processes the following entry in the general ledger of Quinn Ltd:
Dr Sales $20 000
Cr Cost of sales $20 000
Problem 1: Do you agree this treatment will eliminate intragroup sales of inventory for the year ending 30 June 2020? If so, why? If not, provide both an explanation of why not and the correct treatment.
Assume you win the lottery and have a choice to receive your winnings one of two ways.
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