Company A owns 51 per cent of the issued capital of Company B and Company A owns 60 per cent of the issued capital of Company
C. Company A controls both B and
C. If Company A sells inventory for $500,000 to Company C and Company C sells it to Company B for $600,000 and Company B sells it to an entity external to the group for $700,000, the amount of sales revenue to be recorded for that inventory for the group of companies is $1,560,000:

Question

Quizplus · Accepted Answer

The sales revenue for the group should only include the final sale to an external entity, which is $700,000. Internal sales between Company A, B, and C are eliminated in consolidated financial statements.

Company a Owns 51 Per Cent of the Issued Capital