FAPUP

It is Sun who sold the goods to Sand, and so the unrealised profit of $4000 is included in Sun's profits. So when consolidating, the $4000 needs removing from Sun's profit. So the profit attributable to Sand, the parent, is: 100% Sand = $120,000 80% Sun = 80% x (35000 - 4000) = $24,800 So total = $144,800 Hope that helps :-)