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At what value the goods in transit appear in consolidated statmnt of financial poaition ie at its sale value or orignalcost?
At original cost.
This means that, not only will there be a pup calculation for the intra-group inventory physically located at the “buying” company’s premises, there will also be a need for a pup calculation for the goods in transit that are physically located at the premises of neither the “buyer” company nor the “selling” company
The adjustment is based on the principle that we should notionally accelerate the goods into the hands of the recipient and therefore record the goods Dr Inventory on sofp at invoiced value and Cr Selling company’s current account.
Then eliminate the pup. The pup adjustment is put through the records of the company that has RECOGNISED the profit ie the selling company
Ok?
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