Union Plc is the sole subsidiary of Water Plc. The cost of sales figures for 2018 for Water Plc and Union Plc were GH¢55 million and GH¢50 million respectively. During 2018, Water Plc sold goods which had cost GH¢10 million to Union Plc for GH¢15 million. Union Plc has not yet sold any of these goods. What is the consolidated cost of sales figure for 2018?
Union Plc is the sole subsidiary of Water Plc. The cost of sales figures for 2018 for Water Plc and Union Plc were GH¢55 million and GH¢50 million respectively. During 2018, Water Plc sold goods which had cost GH¢10 million to Union Plc for GH¢15 million. Union Plc has not yet sold any of these goods. What is the consolidated cost of sales figure for 2018?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Union Plc is the sole subsidiary of Water Plc. The cost of sales figures for 2018 for Water Plc
and Union Plc were GH¢55 million and GH¢50 million respectively. During 2018, Water Plc sold
goods which had cost GH¢10 million to Union Plc for GH¢15 million. Union Plc has not yet sold any
of these goods. What is the consolidated cost of sales figure for 2018?
Expert Solution
Step 1
Consolidation is the process of combining books of accounts of parent company and subsidiary companies. Then, consolidated financial statements are being prepared.
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