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In an accounting period, a parent company has sales of £867,000 and its80% subsidiary has sales of £121,000. The group sales figure for the period is £963,800. True or False?
False as in consolidation the entities revenue is not discounted by the interest of Parent company.
Good question.
My answer is that as teh parent company although controls80% of the subsidiary,100% of the accounts should be reported upon consolidation. Therefore100% of sales should be reported for group sales . i.e988,000 (867000+121000). The effect of equity however shows the part for minority interest representing the20% ownership in the financial statement.
Hope this helps
X
FALSE
False, good explanation given by steve
False
Group Sale + Subsidry sale(Consifer Accusition date) - Intergroup sale
False, As parent company sales is of
£ 867000 and Subsidiary sales is £ 121000, hence the group sales is £ 988000 not £ 963800
the sales will be988000 so its false
