Boo co and goose co (bpp consolidate qstn)

This topic has 3 replies, 2 voices, and was last updated 4 years ago by P2-D2.

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February 3, 2021 at 3:57 pm #608990
cadhakan
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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
February 8, 2021 at 8:23 pm #609712
P2-D2
Keymaster
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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
February 15, 2021 at 7:15 am #610444
cadhakan
Participant
- Topics: 71
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Thank you sir I understand and I did it. Thanks again
February 20, 2022 at 8:07 am #648938
P2-D2
Keymaster
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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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