H has a 75% owned subsidiary S. During the year ending 31 December 2021 H sold inventory to S for an invoice price of £800,000. S have since sold 75% of that inventory to third parties. The sale was at a mark-up of 25%on cost to H. S is the only subsidiary of H. What is the adjustment to inventory that would be included in the consolidated statement of financial position of H at the year-ending 31 December 2021 resulting from this sale? Show you calculations.
H has a 75% owned subsidiary S. During the year ending 31 December 2021 H sold inventory to S for an invoice price of £800,000. S have since sold 75% of that inventory to third parties. The sale was at a mark-up of 25%on cost to H. S is the only subsidiary of H. What is the adjustment to inventory that would be included in the consolidated statement of financial position of H at the year-ending 31 December 2021 resulting from this sale? Show you calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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H has a 75% owned subsidiary S. During the year ending 31 December 2021 H sold inventory to
S for an invoice price of £800,000. S have since sold 75% of that inventory to third parties. The
sale was at a mark-up of 25%on cost to H. S is the only subsidiary of H.
What is the adjustment to inventory that would be included in the consolidated
financial position
calculations.
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