FINANCIAL STATEMENTS- PLEASE HELP :((

mesh87
mesh87 Registered Posts: 3
in AAT Level 4 (Level 8 in Scotland)
Please help- question 9/10 from the green light test. How to work out inter company adjustment in the retained earnings parent sold goods which had cost £3,200,000 to sub for £4,100,000 a third of these goods still remain in inventory at end of the year. What amount should be deducted? Please help :(((

Thank you

Comments

  • CeeJaySix
    CeeJaySix Registered Posts: 645
    The profit on the sale is £900,000. One third of that remains unrealised as it hasn't been sold outside the group. Therefore £990k / 3 = £300k, dr parent retained earnings, cr sub inventory.
  • mesh87
    mesh87 Registered Posts: 3
    hello and thank you so much for getting back, i am doing exactly as above in the green light zone and its incorrect?!
  • CeeJaySix
    CeeJaySix Registered Posts: 645
    There have been errors found in the past in Green Light answers. What does it say the correct answer is?
  • Marco
    Marco Registered Posts: 23
    Hi Mesh.
    CeeJay answer is right, i checked it on green light question and the answer is 300000.
    remember when u go back to the green light for same question it wont be question9/10 because they change the question's number all the time

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