DFS-Consolidated balance sheets/p&l

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I am trying to work out how to do consolIdated balance sheets and p&l when there has been an intercompany transfer ie sales from H to S.<BR>I am not very good at explaining myself so have done an example.<BR><BR>H sells £100k of stock to S of which £20k is profit.<BR>60% of this was sold by S at the end of the year.<BR><BR>What are the amendments to the Consolidated balance sheets and P&L.

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    DFS-Consolidated balance sheets/p&l

    Ok the P & L side of the consoldiation goes like this.<BR><BR>Always rememember that you MUST use the higher selling price as your figure. So meaning what ever S sold it to the other company for, thats the only figure you need to take notice of. So the £100k<BR><BR>Now that figure goes in to the P& L as the following:<BR><BR>Turnover (less higher selling price + Combined parent and Sub co.)<BR>Cost of sales (less higher selling price + combined parent and Sub co)<BR>be careful of the COS add up the to control P & S then deduct the higher sale price.<BR><BR>hope this helps.........<BR><BR><BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    DFS-Consolidated balance sheets/p&l

    This is great but what if not all the stock was sold by year end????????????????
  • System
    System Posts: 100,534 🤖 Admin 🤖
    DFS-Consolidated balance sheets/p&l

    Hi<BR><BR>If 40% of the inter-co trading stock was still with S at the end of the year then you will need to adjust stock and reserves with 40% of the profit. If this was a case of a subsidiary selling to parent company, there will be a minority interest adjustment to make as well.

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