Consolidated income statement when not all the goods are sold

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val0123
val0123 Registered Posts: 42 Regular contributor ⭐
Hiya,

Does anybody know how to eliminate intra-group trading when not all of the goods had been sold during the period ? I can't find anything in my text book about it.

Thanks

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  • taskey
    taskey Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
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    it is in my book under unrealised profits. which it says

    it is unlikely that you will be asked to account for unrealised profits on intra group sales, however you may be asked to explain how and why this is necessary
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    taskey wrote: »
    it is in my book under unrealised profits. which it says

    it is unlikely that you will be asked to account for unrealised profits on intra group sales, however you may be asked to explain how and why this is necessary

    My notes dont say that! I got a question in an Assignment that had unrealised profits and spent ages trying to understand how to do it.
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Taskey,

    Can you explain "how and why this is necessary"? :laugh:
  • taskey
    taskey Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
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    only realised profits can be included in the income statement, so it says in my book (but this is bpp so i would rather believe in a winnie the pooh book)

    Tracy
  • taskey
    taskey Registered Posts: 1,800 Beyond epic contributor 🧙‍♂️
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    jewels.p wrote: »
    Taskey,

    Can you explain "how and why this is necessary"? :laugh:

    i know, bpp are rubbish, 1 hand, dont need to know it, other hand but explain it anyway AARRGGHH
  • bobo
    bobo Registered Posts: 23 New contributor 🐸
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    Hi
    if for example 50% of goods were not sold you decrease 50% of profit on goods sold between companies. then you debit cost of sells and credit inventories - as far as I remember :)
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