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Question 1: DALAS acquired 80% of HOVER on 1 July 2002. In the post-acquisition period DALAS sold goods to HOVER at a price of £12 million. These goods had cost DALAS £9 million. During the year to 31 March 2003 HOVER had sold £10 million (at cost to HOVER) of these goods for £15m million. How will this affect group cost of sales in the consolidated statement of profit or loss of DALAS for the year ended 31 March 2003?
Option 1: Increase by £11.5 million
Option 2: Increase by £9.6 million
Option 3: Decrease by £11.5 million
Option 4: Decrease by £9.6 million
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