Based on the information given the consolidated cost of goods sold for 2021 is $6,092,800.
First step is to calculate 2021 Intra-Entity Gross Profit
2021 Intra-Entity Gross Profit= ($1,000,000 − $820,000) ×15%
2021 Intra-Entity Gross Profit= $180,000 × 15%
2021 Intra-Entity Gross Profit= $27,000
Second step is to calculate 2020 Intra-Entity Gross Profit
2020 Intra-Entity Gross Profit= ($640,000 − $450,000) ×18%
2020 Intra-Entity Gross Profit=$190,000 ×18%
2020 Intra-Entity Gross Profit = $34,200
Third step is to calculate consolidated cost of goods sold for 2021 using this formula
Consolidated COGS = Parent's COGS + Subsidiary's COGS− Total COGS in Intra-Entity Transfer − Intra-Entity Gross Profit Deferred from 2020 + Intra-Entity Gross Profit Deferred from 2021
Let plug in the formula
Consolidated COGS =$5,800,000+ $1,300,000- $1,000,000-$34,200 +$27,000
Consolidated COGS = $6,092,800
Inconclusion the consolidated cost of goods sold for 2021 is $6,092,800.
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