April 2010 No 8 S is a holding company that has two subsidiaries, T and U. During the year, S made sales of £1.0m, including sales of £0.2m to T. T made sales of £2.0m, including sales of £0.3m to U. U made sales of £4.0m including sales of £0.6m to S. Which of the following is the correct figure for group sales according to the consolidated income statement that will be prepared by S? how should i calculate for this question ?
We need to cancel out any sales within the group. So, for example of S's sales only include 1.0m - 0.2m. Do this for all the companies and add up the result.