For the following question;
X's (parent) receivables include a debt of $2900 due from Y (subsidiary). Y's current liabilities include a debtvof $2500 due to X. The difference is cash in transit.
I know for cash in transit you,
DR.Cash
CR. Receivables
However on doing that my CSoFP doesn't balance and has a difference of 400.
Where am I going wrong?
I have also cancelled 2500 and 2900 from the respective recdivable and payable.
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Inter Company Transactions
11y ago#1I hope that you have those last two amounts transposed! The cancellation should be Credit $2,900 from receivables, Debit $2,500 from payables and Debit $400 into cash.
You may have forgotten the $400 or double counted it.
I suggest that you deal with the two elements of the question separately.
Dr cash, Cr receivables $400
and then cancel, but not $2,900 against $2,500. There's now only $2,500 left in receivables after you have put through the above entry for $400
Does that solve your problem?
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