Consolidated Financial Statement

Dear Sir,

Understand unrealised profit for inter-related trading need to be removed. Yet I have no clue of this question. Kindly advice.

Swing purchased 80% of Cat’s equity. Swing sold goods which costs $80,000 to Cat, at an invoiced cost of $100,000, Cat had 50% of the goods still in inventory at the year end. Here are the figures in both statement:

P&L Statement:
Revenue: Sewing: $5,000,000; Cat :$1,000,000.
Cost of Sales: Sewing:$2,900,000; Cat:$600,000

Financial Position Statement
Inventory Sewing: $500,000; Cat:$120,000

Answer of Consolidated P&L Statement:
Revenue: $5,000,000+$1,000,000-$100,000=$5,900,000 (I can understand this part)
Cost of Sales: $2,900,000+$600,000-$100,000 +$10,000 =$3,410,000
(Sir, I don’t quite understand the answer. My understanding is that at Group level to remove cost of $800,000 and at Subsidiary level to remove half of the inventory of $50,000, after that add back double deducted cost of $40,000.
i.e. $$2,900,000-$80,000+$600,000-$50,000 + $40,000=$3,410,000 Is it correct?

Answer of Consolidated Financial Position Statement:

Inventory : $500,000 + $120,000-$10,000 (why need to minus unrealised profit of $10k)

Thank you!