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Question 1: A parent's beginning inventory containing merchandise purchased above cost from its 80 percent owned subsidiary, was sold during the current year. The elimination entry in the working papers recognizing this intercompany profit includes a debit to the subsidiary's beginning accumulated profits of:
Option A. 20 percent of the intercompany profit
Option B. 80 percent of the intercompany profit
Option C. 100 percent of the intercompany profit
Option D. The subsidiary's beginning accumulated profits is not affected in this case
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