Answer:
The correct option is C,$795,000
Explanation:
The consolidated inventory of Allister and Barone at year end 31st December is the sum of their individual inventories minus the allowance for unrealized profit on intra-group sales of $180,000
Allowance for unrealized =amount of unsold inventory/total sales*profit on sale
amount of unsold =10%*$180,000=$18,000
total profit on the sale=sales price-cost=$180,000-$130,000=$50,000
allowance for unrealized profit=$18,000/180,000*50,000=$5,000
Consolidated inventory=$500,000+$300,000-$5,000=$795,000
