Company A owns 51% of the issued capital of Company B and Company A owns 60% 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 amount of sales revenue to be recorded for the group of companies is $700,000. Intra-group transactions are eliminated on consolidation, so only the final sale to an external entity is recorded as revenue for the group.

Company a Owns 51% of the Issued Capital of Company