Sud SA, a subsidiary of Nord SA, sold goods to Nord at a transfer price. At the reporting date, goods worth 80,000 at transfer price remain in Nord's inventory. Case convention: Sud's profit margin on these sales is 25 % of the transfer price. Calculate the unrealised profit to be eliminated in the consolidated financial statements.
- Inventory remaining with Nord, at transfer price
- 80,000
- Seller's profit margin (case convention)
- 25 %