Ébène SA, a subsidiary of Orme SA, sold goods to Orme. At the reporting date, goods worth 60,000 at transfer price remain in Orme's inventory. Case convention: Ébène's profit margin is 30 % of the transfer price, and the tax effect is ignored. Record the consolidation entry that eliminates the unrealised profit contained in that inventory.
- Inventory remaining with Orme, at transfer price
- 60,000
- Seller's profit margin (case convention)
- 30 %