- This topic has 6 replies, 2 voices, and was last updated 12 years, 2 months ago by
.
-
Topic
-
Wiley Question –
under intercompany transactions chapter (in bold)
B. Typical intercompany accounts receivable/accounts payable and the amount of each to eliminate are:
1. (Trade) Accounts Receivable/Accounts Payable (100%): The full amount of the intercompany receivable and intercompany payable must be eliminated;
2. Loan Receivable/Loan Payable;
3. Interest Receivable/Interest Receivable (100%);
4. Dividends Receivable (100%)/Dividends Payable (Intercompany %): Note that only the intercompany amount of the dividends payable must be eliminated. Any dividend payable to noncontrolling shareholders will not be eliminated.
Example:
Assume that during the period Company P, the parent company, provided services to its subsidiary, Company S for $10,000. Each company would bring the following account balances onto the consolidating worksheet:
Company P / I/C Revenue (from S) = $10,000 (DR)
Company S / I/C Expense (to P) = $10,000 (CR)
On the consolidating worksheet the following eliminating entry would be required so that no intercompany revenue or expense will show on the consolidated financial statements:
DR: I/C Revenue (from S) $10,000
CR: I/C Expense (to P) $10,000
- The topic ‘Mistakes in cpaexcel far textbook’ is closed to new replies.
