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

Show equity and debt issues, A company is necessary by law to offer an issu...

A company is necessary by law to offer an issue of new equity finance on a pro-rata basis to its existing shareholders. This makes sure that the existing pattern of ownership and c

Adjustment entry, 1) A sales discount correctly taken by the charge custome...

1) A sales discount correctly taken by the charge customer was debited to Sales at the time the entry was recorded. This error will cause. A) the net income for the period to be un

First meeting of creditors-public examination, First Meeting of creditors ...

First Meeting of creditors The Official Receiver must convene this meeting within 60 days of the receiving order, unless the court extends the time, by giving notice to each c

Answer for Assignment, Transaction Entry Information: May 1 Owener H.Hadi ...

Transaction Entry Information: May 1 Owener H.Hadi invested $40,000 in the business

How to determine the market economy, How to determine the market economy ...

How to determine the market economy Within a market economy there are strong competitive forces at work which ensure that failure to enhance owners' wealth won't be tolerated f

Process to increase the financial health of company, Process to increase th...

Process to increase the financial health of company Financial affairs of a limited company enter public domain. With exception of small companies, there is also a requirement f

Concepts in accounting, Mr. Inherits 30000. Decides to open a salon jj salo...

Mr. Inherits 30000. Decides to open a salon jj salon. On 1/4/2016 commits 10000 to the business Opens an a/c in the bank What will be the money under capital in his books on 1/4/10

List the various methods of determining goodwill, Question 1 Explain the f...

Question 1 Explain the five accounting concepts with an example Separate entity concept Going concern concept Money measurement concept Cost concept Dual aspect

Sales, what is recorded sales on account of 3,280

what is recorded sales on account of 3,280

The trustee in bankruptcy, THE TRUSTEE IN BANKRUPTCY 1) Appointment o...

THE TRUSTEE IN BANKRUPTCY 1) Appointment of trustee The trustee is appointed: By the creditors by ordinary resolution, or By the committee of inspection, if so

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