ACCA FR · Chapter 13 · Question 1 of 11
Cougar Co acquired a subsidiary on 1 April. For the year ended 31 December, Cougar Co's revenue was $10,000,000, and the subsidiary's revenue was $6,000,000, earned evenly through the year. After acquisition, Cougar Co sold goods to the subsidiary for $800,000. What is consolidated revenue?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $13,700,000
Explanation
The subsidiary's results are consolidated only from the acquisition date: $6,000,000 x 9/12 = $4,500,000. Intra-group sales are eliminated: $10,000,000 + $4,500,000 - $800,000 = $13,700,000.
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