unit 7

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



  • taskey
    taskey Registered Posts: 1,800
    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?


  • oakley
    oakley Registered Posts: 73 ? ? ?
    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)


    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 B)
  • taskey
    taskey Registered Posts: 1,800
    lovely thanks for the reply, i will work through that and see how it looks.

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