Associate

Hi Sir,

I would be grateful if you can assist me with the followings,

I have Kaplan study textbooks and it explains the trading with associate, as if,

the parent sell inventory to associate then we calculate the provision on unsold inventories to the limit of the investor then the following journal

DR group retained earnings
CR investment in associate

and if the associate sell the parent inventory we follow the same steps and same journal as
DR group retained earnings
CR investment in associate

having said that, I have another study material which I got from Chania and it says the followings;

Suppose parent sells inventory to associate

DR Retained earnings
CR Investment in associate

Suppose Associate sells inventory to Parent

DR Retained earnings
CR Group Inventory

can you please advise me which one is correct.

Thanks