Nodus Co. acquired 100% of Aiello Inc. on January 2, 2016. During 2016, Nodus sold goods to Aiello for $300,000 that cost Nodus $220,000. Aiello still owned 30% of the goods at the end of the year. Cost of goods sold was $985,000 for Nodus and $650,000 for Aeillo. What was consolidated cost of goods sold

$1,415,000

Explanation:

To make consolidated statements company needs to consolidate the financial data of its own and its subsidiary.

Cost of goods sold can be consolidated of parent and subsidiary as follow:

First

Add Cost of goods sold of both companies

Total Sales = Nodus Co. Cost of goods sold + Aiello Inc. Cost of goods sold

Total Sales = $985,000  + $650,000 = $1,635,000

Now deduct the cost of goods sold of sales made to each other because sale is made within the group is not recorded for consolidation purposes and it is not a sale for a group it is an internal group transfer.

Consolidated Sales = Total cost of goods sold - cost of goods sold for Internal Sales

Consolidated Sales = $1,635,000 - $220,000 = $1,415,000