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sir kindly tell us the treatment of cash and goods in transits in detail
how we have to deal with it in consolidated statemnt of f/p
and i/s ?? with double entry
plzz explain
i will be thank full to youI answered this same question within the last two days!
Accelerate the cash / goods into the virtual possession of the receiving company. The double entry for cash in transit is Dr cash account and Cr the intra-group receivable account
For inventory the double entry is Dr inventory and Cr intra-group payables
There is no affect on the PorL except for the additional pup required on the inventory in transit. That pup needs to be added to cost of sales in the consolidation and the adjustment is to the retained ear Nina’s of the company that recognized the profit.
For the balance sheet, the adjustments are as shown already at the start of this reply.
Put the adjustments onto your question paper as you work out what they are and remember to keep double entry within the one set of records for each of the in transit adjustments
Does that answer your problem?
it means when we have cash intransit we have to add cash
n recievables
n when we have goods in transits we have to add inventry n less payables ?“it means when we have cash intransit we have to add cash
n recievables” NO! Add cash, deduct from receivables“n when we have goods in transits we have to add inventry n less payables ?” NO! Add inventory and add payables
Think about what’s happening and, particularly, think about double entry!!!!!
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