The document provides an example of consolidation accounting for intercompany sales and the sale of a plant between subsidiaries. It shows the calculation of cost of goods sold of $10,600 relating to goods sold between subsidiaries L Ltd. and J Ltd. and between Jordan Ltd. and Laila Ltd. It also shows the accounting entry to eliminate a $500,000 plant sale between subsidiaries, recognizing a $50,000 loss on sale and $10,000 reduction in accumulated depreciation.
Original Description:
Learn about intercompany transactions of plant & Machinary
The document provides an example of consolidation accounting for intercompany sales and the sale of a plant between subsidiaries. It shows the calculation of cost of goods sold of $10,600 relating to goods sold between subsidiaries L Ltd. and J Ltd. and between Jordan Ltd. and Laila Ltd. It also shows the accounting entry to eliminate a $500,000 plant sale between subsidiaries, recognizing a $50,000 loss on sale and $10,000 reduction in accumulated depreciation.
The document provides an example of consolidation accounting for intercompany sales and the sale of a plant between subsidiaries. It shows the calculation of cost of goods sold of $10,600 relating to goods sold between subsidiaries L Ltd. and J Ltd. and between Jordan Ltd. and Laila Ltd. It also shows the accounting entry to eliminate a $500,000 plant sale between subsidiaries, recognizing a $50,000 loss on sale and $10,000 reduction in accumulated depreciation.