Parent Company owns 80% of Subco Ltd.Subco sells almost one-half of its output to Parent Company.How would these sales be reported in Subco's financial statements and Parent's consolidated financial statements? $\begin{array}{ll}\text { Subco's } & \text { Parent's Consolidated } \
\text { Statements } & \text { Statements }\
\text { A) Included } & \text { Included } \
\text { B) Included } & \text { Eliminated } \
\text { C) Eliminated } & \text { Included } \
\text { D) Eliminated } & \text { Eliminated }
\end{array}$

Question

Quizplus · Accepted Answer

In Subco's individual financial statements, sales to Parent Company are included as they are external transactions from Subco's perspective. However, in the consolidated financial statements of the Parent, these sales are eliminated to avoid double counting of revenue within the group.

Parent Company Owns 80% of Subco Ltd A)Option a B)Option B C)Option C D)Option D

Parent Company Owns 80% of Subco Ltd A)Option a
B)Option B
C)Option C
D)Option D