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NEW QUESTION: 1
POXITplc controls another entity, DOBE Ltd, owning 60% of that company's ordinary share capital. At the group's year end, 31 December 2012, DOBE Ltd included $6,000 in its receivables in respect of goods supplied to POXIT plc. However, the payables of POXITplc included only $4,000 in respect of amounts due to DOBE Ltd. The difference arose because, on 31 December 2012, POXITplc sent a cheque for $2,000 to DOBE Ltd, which was not received by DOBE Ltd until 3 January 2013.
Which of the following sets of consolidation adjustments to current assets and current liabilities is correct?
A. Deduct $3,600 from both consolidated receivables and consolidated payables
B. Deduct $6,000 from consolidated receivables and $4,000 from consolidated payables, and include cash in transit of $2,000
C. Deduct $6,000 from both consolidated receivables and consolidated payables
D. Deduct $6,000 from consolidated receivables and $4,000 from consolidated payables, and include inventories in transit of $2,000
Answer: B


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