Boo and Goose q.286 P&RK p. 86 i/co. sales

AAnna7y ago

Hi In the given question Boo (Parent) despatched goods to Goose (Subsidiary) on the last reporting date at an invoiced cost of $100 000. S received the goods two days after the reporting date and recorded the transaction then. In the answer the consolidated Revenue and COS are both reduced by the i/co. sales. Why not only the Revenue? I understand that the Revenue was recorded by the P only while the COS were not recorded by S in the passing year so these costs are not included in S’s COS... Please advise if I’m wrong? Thanks, Anna

P2-D2Tutor7y ago#1

Hi, We always adjust both the revenue and cost of sales, regardless of whether the good have been sold. We only make the PUP adjustment if the good remain in inventory. Thanks

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