Hi,
When a parent sells goods to subsidiary at 50% mark up
Selling price 75
Inventory cost (50)
Unrealised profit = 25?
& 50% of inventory is unsold
Unsold inventory 37.5 (75*50%)
Unrealised profit 12.5 (37.5*50/150)?
Then we have to add the PURP 12.5 to COS and also reduce 12.5 from Inventory. Is this the same procedure when parent sells to subsidiary & when subsidiary sells to parent?
When do we subtract PURP's NCI share from NCI share of subsidiary's profits? That is when parent sells to subsidiary (or) when subsidiary sells to parent?
Txs.