In the Process of Consolidating the Translated Financial Statements of a Foreign

In the process of consolidating the translated financial statements of a foreign operation,what will be the form of the journal entry required to eliminate the foreign currency effect of a purchase of inventory by the subsidiary from the parent entity? Assume that the value of the foreign currency of the foreign operation has increased relative to the reporting currency.

A) $\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Foreign currency loss (P\&L) } & \mathrm{X} & \\\hline \mathrm{Cr} & \text { Cost of goods sold } & & \mathrm{X} \\\hline\end{array}$
B) $\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Inventory } & \mathrm{X} & \\\hline \mathrm{Cr} & \text { Foreign currency gain (P\&L) } & & \mathrm{X} \\\hline\end{array}$
C) $\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Inventory } & \mathrm{X} & \\\hline \mathrm{Cr} & \text { Foreign currency translation reserve } & & \mathrm{X} \\\hline\end{array}$
D) $$\begin{array} { | l | l | r | r | } \hline \text { Dr } & \text { Foreign currency translation reserve } & \mathrm { X } & \\\hline \mathrm { Cr } & \text { Inventory } & & \mathrm { X } \\\hline\end{array}$$