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  • Accounting Entries For Intercompany Transaction

    Загружено:

    Umer Aziz
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    The document provides an example of consolidation accounting for intercompany sales and the sale of a plant between subsidiaries. It shows the calculation of cost of goods sold of $10,600 relating to goods sold between subsidiaries L Ltd. and J Ltd. and between Jordan Ltd. and Laila Ltd. It also shows the accounting entry to eliminate a $500,000 plant sale between subsidiaries, recognizing a $50,000 loss on sale and $10,000 reduction in accumulated depreciation.

    Исходное описание:

    Learn about intercompany transactions of plant & Machinary

    Оригинальное название

    Accounting Entries for Intercompany Transaction

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    The document provides an example of consolidation accounting for intercompany sales and the sale of a plant between subsidiaries. It shows the calculation of cost of goods sold of $10,600 relating to goods sold between subsidiaries L Ltd. and J Ltd. and between Jordan Ltd. and Laila Ltd. It also shows the accounting entry to eliminate a $500,000 plant sale between subsidiaries, recognizing a $50,000 loss on sale and $10,000 reduction in accumulated depreciation.

    Авторское право:

    © All Rights Reserved
    Скачайте в формате DOCX, PDF, TXT или читайте онлайн в Scribd
    Отметить как неприемлемый контент
    36 просмотров1 страница

    Accounting Entries For Intercompany Transaction

    Загружено:

    Umer Aziz
    The document provides an example of consolidation accounting for intercompany sales and the sale of a plant between subsidiaries. It shows the calculation of cost of goods sold of $10,600 relating to goods sold between subsidiaries L Ltd. and J Ltd. and between Jordan Ltd. and Laila Ltd. It also shows the accounting entry to eliminate a $500,000 plant sale between subsidiaries, recognizing a $50,000 loss on sale and $10,000 reduction in accumulated depreciation.

    Авторское право:

    © All Rights Reserved
    Скачайте в формате DOCX, PDF, TXT или читайте онлайн в Scribd
    Отметить как неприемлемый контент
    из 1

    Consolidation Accounting Example

    Cost of Goods sold to be Reported relating to the relevant intra-group sales


             
    Sale from L Ltd. to J Ltd.    
      Portion of Inventory sold in 2017 = 80%    
      Cost of Inventory sold in 2017 = 9600 X (1-16.67%) 6,800  
             
    Sale from Jordan Ltd. to Laila Ltd.    
      Portion of Inventory sold in 2017 = 80%    
      Cost of Inventory sold in 2017 = 6000 X 80% / (1+20%) 4200  
             
    Cost of Goods sold relating to the relevant intra-group
      10,600  
    sales
             

    Accounting Entry ntercompany Sale of Plant


    Amount
    S.No. Date Particulars Amount $
    $
             
    1 Elimination Entry    
      30-Jun-17 Plant 500,000  
        Depreciation Expense 100,000  
        Loss on Sale of Plant   500000
        Accumulated Depreciation   100000
             
             
      Working:      
      Loss on Sale of Plant: Carrying Value - Sale Proceeds    
      Loss on Sale of Plant: 200000 - 150000 = 50000    
             
      Decrease in depreciation Charged:    
      Previous depreciation: 200000 / 5 = 40000    
      New Depreciation : 150000 / 5 = 30000    
      Decrease in depreciation Charged = 40000 - 30000 = 10000    
             

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