Answer:
<u>Consolidated sales and cost goods sold would be:</u>
Revenue : $3,000,000
Cost of Sales : $2,040,000
Explanation:
The Consolidation Process Includes 100% of Poseidon Co. and 100% of Saturn Co.
However Revenues for Saturn is Overstated and Cost of Goods Sold of Poseidon Co. are overstated due to the intragroup sale and thus the sale should be eliminated.
<u>Journal to Eliminate Intragroup Sale</u>
Revenue : Saturn Co $300,000 (debit)
Cost of Sales : Poseidon Co $300,000 (credit)
<u>Consolidated sales and cost goods sold would be:</u>
Revenue : $2,400,000+$900,000-$300,000 = $3,000,000
Cost of Sales : $1,800,000+$540,000-$300,000 = $2,040,000
