Reference no: EM133000713
Question - Following information is related to Parent and Sub Ltd. Subsidiary purchases machine for $10,000 on 1 July 2020
Depreciates asset at 10% per year
On 30 June 2021, it sold the machine to Parent for $80,000
The tax rate is 30%
Required - What is the correct journal entry to record above intra-group profit or loss at the year-end (30/06/2021) consolidated financial reports?
a. Dr Loss on sale $10,000 - Cr Machine $10,000
b. Dr Machine $10,000 - Cr Loss on sale $10,000
c. Dr Machine $80,000 - Cr Gain on sale $80,000
d. Dr Gain on sale $10,000 - Cr Machine $10,000