ACCA FA · Chapter 13 · Question 5 of 12
During the year, P sold goods to its subsidiary S for $120,000. P's revenue was $900,000 and S's revenue was $400,000 (both including intra-group sales where relevant). What is the consolidated revenue?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $1,180,000
Explanation
Intra-group sales must be eliminated, because the group cannot sell to itself. Consolidated revenue = $900,000 + $400,000 - $120,000 = $1,180,000. Simply adding both companies' revenue gives $1,300,000, and eliminating the sales twice gives $1,060,000.
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