Consolidated income statement when not all the goods are sold

val0123

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

taskey

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

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

Taskey,

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

taskey

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

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

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