Large plc purchased 80% of the equity shares in Little plc on 1 January 20X1. During the year ended 31 December 20X1, Large sold inventory to Little at a sales price of £500,000. All of the goods remained in Little’ inventory. Large applied a margin of 20%. Extracts from the statement of profit or loss for the two entities are shown below:
What would be the revenue and cost of sales figures reported in the consolidated statement of profit or loss for the year ended 31 December 20X1? Answer to the nearest £000

Question

Large plc purchased 80% of the equity shares in Little plc on 1 January 20X1. During the year ended 31 December 20X1, Large sold inventory to Little at a sales price of £500,000. All of the goods remained in Little’ inventory. Large applied a margin of 20%. Extracts from the statement of profit or loss for the two entities are shown below:   
  What would be the revenue and cost of sales figures reported in the consolidated statement of profit or loss for the year ended 31 December 20X1? Answer to the nearest £000

Accepted Answer

Revenue 3,250, Cost of sales 2,500

Answer

Revenue 3,750, Cost of sales 2,900

Answer

Revenue 3,250, Cost of sales 2,400

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Large plc purchased 80% of the equity shares in Little plc on 1 January 20X1. Du...

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	Large	Little
	£000	£000
Revenue	2,000	1,750
Cost of sales	(1,650)	(1,250)