Boo co and goose co (bpp consolidate qstn)

VDVidhi Dhakan5y ago

Hi sir, I am not able to understand the adjustment for Inventory, recievables and payables in this qstn. The qstn says that boo co dispatched goods which cost 80000$ to goose co at an invoiced Cost $100000.Goose co received the goods on 2 jan 2009 and recorded the transaction. I did this question and I see the answer also but I am not able to get it this whole part and I see in adjustment when we do for inv, rec, payable. Can you please explain me how to deal with this part and how to do adjustment for this 3 parts in SOFP . Thanks in advance

P2-D2Tutor5y ago#1

Hi,y This is inventory in transit. To adjust for this you firstly need to record the inventory in the group accounts (Dr Inventory Cr Payables) and then eliminate any unrealised profit (Dr RE CR Inventory). You then need to remove the intra-group balances (Dr Payable Cr Receivables). Try it out with what I've suggested above and then let me know how you get on. Thanks

VDVidhi Dhakan5y ago#2

Thank you sir I understand and I did it. Thanks again

P2-D2Tutor4y ago#3

What about the question you mention above? You just state a BPP questions and don't ask anything about it, so I can't really help you, sorry. Thanks

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