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

Create a trade receivables ledger control, Problem: (a) Many businesse...

Problem: (a) Many businesses find it useful to maintain a control account in respect of both their trade receivables and trade payables. Describe why such control accounts ar

Jj, liabilities and its types

liabilities and its types

How will url services be affected, URL services has two divisions. Basic we...

URL services has two divisions. Basic webpages and custom webpages. Ricky Vega, Custom's manager wants to find out why Custom is not profitable. He has prepared the following repor

Inventory., Tubby is a retailer that buys and sells handmade robotic toys. ...

Tubby is a retailer that buys and sells handmade robotic toys. He buys a basic prototype and then programs it to do all sorts of unique tricks. The following information was provi

Vat, 1.discuss how the vat system works 2.list and explain the vat supply c...

1.discuss how the vat system works 2.list and explain the vat supply categories, provide examples in each category write as an essay of 500 words

Difference between a static budget and a flexible budget, XYZ Enterprises m...

XYZ Enterprises manufactures tires for the Formula One motor racing circuit. For August 2011, XYZ budgeted to manufacture and sell 3,000 tires at a variable cost of $74 per tire an

Technique of managerial control through budgets, Budgetary Control is a tec...

Budgetary Control is a technique of managerial control through budgets. Elaborate.

Lower of cost or market, Lower of Cost or Market - Valuing ASSETS for finan...

Lower of Cost or Market - Valuing ASSETS for financial reporting purposes. Normally‘cost' is the purchase price of the asset and ‘market' refers to its current replacement cost. GE

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

Group accounts, Group Accounts A company can have investments in other co...

Group Accounts A company can have investments in other companies in the form of: ordinary shares, preference shares and loan stock. The investment in ordinary shares leads to own

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