Question

How will the elimination of unrealized intercompany inventory profits recorded on subsidiaries books affect vonsolidated retain earnings

Answer 1

Answer:

Consolidated retained earnings are consistently equivalent to the parent's held profit under the completely balanced or adjusted equity strategy .Since the parent organization concedes unrealized profits in the income from sub and investment in sub accounts and since income from sub is finished off to the parent's retained earnings ,the closure balance in consolidated retained earnings will reflect the decrease related with the deferral of unrealized profits.