unit 7

taskey

trying to dome some mock sims but cannot find the info i need on discrepancies with inter company transfers. my bpp book of unit 6 & 7 does not cover it, so confused. can anyone point me in the right direction please

Tracy

taskey

Company has 2 divisions

A sells £750 worth of goods to B, but B only records £600 in books.

When consolidating, how do i account for the difference?

Do i just consolidate the £600 off?

Thanks

Tracy

oakley

on consolidation

A will need to have interco sales removed of £750

presume the invoice has not been paid

A's AR from B will be £750

B's AP to A will be £600

B's Stock of A suppllied items will be £600 (assuming none have been sold)

Adjustments

B's AP to be increased by £150 to £750 , offset to Inventory (AR and AP now net to 0)

Profit in Inventory to be adjusted £750 x PII % rate (to account for the profit A has taken on sale to B and still in stock at

taskey

lovely thanks for the reply, i will work through that and see how it looks.

Tracy