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

Trust law and accounts, Trust There is no generally accepted definition...

Trust There is no generally accepted definition of a trust, although many have attempted. Underhill defines a trust as"an equitable obligation binding a person (who is called a

Ifrs guidelines, IFRS guidelines IFRSs Gives the guideline on the conte...

IFRS guidelines IFRSs Gives the guideline on the content and the accounting statements of certain events and transactions in the financial statements. The following IFRSs are r

Adjudication order-adjudication of debtor, Adjudication order The court...

Adjudication order The court may adjudge the debtor bankrupt on the application of the O.R. or any creditor in the following cases: If the creditors so resolve at their first

Clarity and transparency in project, Clarity and transparency The terms...

Clarity and transparency The terms of the payment package must be clear and transparent so that directors and shareholders are in no doubt as to when rewards have been earned o

Determine annual operating cash flow, A 4 year project has an initial asset...

A 4 year project has an initial asset investment of 306600, and initial net working capital investment of 29200, and an annual operating cash flow of -46720. The fixed asset is ful

Relevance to investors, (a) IFRS 8 Operating segments requires that segment...

(a) IFRS 8 Operating segments requires that segmental information be provided by listed entities. Clearly FGH is looking to list and hence IFRS 8 will be applicable. The disclosure

Determine the basis of the ultimate cost of the payment, Given information:...

Given information: Offered a $20 million commercial loan priced using a 3month LIBOR index+100bp. After some preliminary research, using a money center bank's swap trading desk

What will the t-account of the banking system, Suppose that the Fed buys $1...

Suppose that the Fed buys $1 million of bonds from the First National Bank. If the First National Bank and all other banks use the resulting increase in reserves to purchases bonds

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