Differences in inter company balances-group accounts, Financial Accounting

Assignment Help:

Differences in Inter company balances

i) Cash in transit
Where one company may have sent cash which is yet to be received by the other company as at the end of the financial period and thus irrespective  of the  company sending the cash, the following entry will be made;
         DR.  Group cash at bank
                 CR. Group accounts receivable/payables.


ii) Goods in transit
Whereby one company has sent goods that are yet to be received by the other company as at the end of the financial period and in most cases it is assumed that the goods are sent at an inflated price and thus there is an unrealized profit thereof. The relevant entry will be

DR.  Group inventory (with the cost of the goods)
DR.  Group retained profit (with holding company share of unrealized profit)
DR. M.J (with M.J’s share of unrealized profit if  it is subsidiary company sending goods)
       CR   Group account receivables /payables.


iii) Administration expenses

The holding company may have charged the subsidiary company with its share of administration expenses but this amount is yet to be accrued or accounted for by the subsidiary…

The relevant entry will be;

DR.  Group retained profits (with holding company share of admin expenses)
DR.  M.I (with M.I share of admin expenses)
       CR.  Group accounts receivable/payable.


Related Discussions:- Differences in inter company balances-group accounts

State the types of business organizations, State the types of business orga...

State the types of business organizations There are numerous types of business organizations: Service business-doctors, lawyers, barber shop etc. Merchandising busin

Stock''s expected constant growth rate, Normal 0 false false ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4 The beta coefficient

What do you eman by lease, Q. What do you eman by Lease? Lease - Convey...

Q. What do you eman by Lease? Lease - Conveyance of buildings orland, equipment or other ASSETS from one person (LESSOR) to another (LESSEE) for a specific period of time for m

What is financial risk when company experiencing changes, Financial risk is...

Financial risk is the likelihood of a company experiencing changes in the level of its distributable earnings as a result of the need to make interest payments on debt finance or p

Virtual learning expects net revenues, Virtual Learning Inc., an Ontario-ba...

Virtual Learning Inc., an Ontario-based company on the cutting edge of technology, is analyzing the possibility of providing university-level courses for York University. This virt

Homework, i have some homework that need help

i have some homework that need help

Demand curve for a consumer, Suppose the consumer is at coffee shop 1. Coff...

Suppose the consumer is at coffee shop 1. Coffee shop 1 charges $2.00 per cup. - Draw and label the demand curve for a cup of coffee for the consumer (please do not forget to sp

Associate companies , ASSOCIATE COMPANIES (IAS 28) An associate company i...

ASSOCIATE COMPANIES (IAS 28) An associate company is a company in which the investing company owns more than 20% but less than 50% of the voting rights.  This means that the inve

Personal property, Personal Property - Movable property which isn't affixed...

Personal Property - Movable property which isn't affixed to land (REAL PROPERTY). Personal property comprises tangible items likecars, cash and computers and intangible items, like

Steps required to do the arbitrage. , John Chan considers buying a six-mont...

John Chan considers buying a six-month stock futures contract on the shares of Li & Fung Limited. Shares of Li & Fung Limited are now trading at $50 per share and it is expected th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd