Problem
Rabbit Co has owned 60% of Otter Co for many years.
Dunng the year to 30 September 20X3, Rabbit Co sold goods to Otter Co and $75,000 of these goods remain in inventory at the year end. Rabbit Co also purchased goods from Otter Co and $26.000 of these goods remain in inventory at the year end.
All group companies apply a 25% mark-up on cost.
Calculate the unreallsed profit to be eliminated from group retained earnings at 30 September 20X3.