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INTER-COMPANY TRANSACTIONS AND BALANCESAs the associate company is not consolidated, care should be taken when there are trading transactions and inter-company balances between the investing company and associate company.
The following general approaches should apply:1) Inter-company sales of inventory and PPE should be ignored and not adjusted for.2) Incase of unrealized profit on PPE, opening and closing inventories and excess depreciation, then the investing company’s share of these items is not deducted from the group retained profits and also from the investment in associate company appearing in the balance sheet.
If the sale took place in the current year, then the Unrealised profit on PPE and on closing inventory and excess depreciation are deducted from the investing company share of profit before tax in associate company.However, if the sale took place in previous financial periods, then the UP on PPE, UP on opening inventory and excess depreciation are deducted from the group retained profits b/d.NOTE: The accounting treatment is the same irrespective of the company that made the sale.3) In the case of inter-company balances, the amount due to or from the associate company will still appear in the final balance sheet as they are not supposed to be cancelled out.However you may present the amounts due to or from associate company as a separate item from the other receivables or payables.
Wright Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $243,339, $313,087, and $415,174, respectively
case laws
Income Statement 2013 2012 2011 Vertical Anaylsis Vertical Anayl Horizontal Net revenue 5,075,390 4,763,180 4,158,507 year 1 year 2 Anaylsis Cost of goods 1,377,242 1,297,102 1,134
You just purchased a bond that matures in 12 years. The bond has a face value of $1,000 and has an 7% yearly coupon. The bond has a present yield of 5.74%. What is the bond's yield
SEC reporting implications i) Potentially inaccurate reporting of executive compensation in proxy statements and annual reports ii) Potential violation of securities and Law
Explain the movements in working capital in terms of a business''s cash cycle. Explain some of the options available and their effect on the cash cycle.
Indicate how each of the following transactions affects the accounting equation. a.Purchase of supplies on account. b.Payment of wages. c.Cash sale of goods for more than their cos
FV of Bond 20000, CR 0.045, MR 0.059, Remaining payments 32. Answer
#1. Quarter Corporation had the following transactions during the quarter ended June 30, 2010: Loss from tsunami damage (extraordinary) $985,000 Payment of fire insurance premium f
MarmadukeMuffett once had a girlfriend who ran an antiques business in London'sKings Road. Ever since then, he has been hooked on the furniture trade and now runsMarmaduke'sMarvell
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