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We deduct from both revenue and cost of sales the amount of 14000 which is the sale of goods. Why we deduct this amount?
Because when we consolidate it’s like preparing the financial statements for a single entity.
So, when parent sells to subsidiary or subsidiary sells to parent, that’s like me selling goods to me
So we need to reduce revenue and cost of sales by the value of the intra-group trade
OK?
(That’s covered in the video lectures – have you watched them?)
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