Accountancy Forum
  • Home
  • Members
  • Team
  • Help
  • Search
  • Register
  • Login
  • Home
  • Members
  • Help
  • Search
Accountancy Forum The Profession Accounting and Audit v
« Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 … 28 Next »
Question: Journal Entry on Investment

 
  • 0 Vote(s) - 0 Average
Question: Journal Entry on Investment
Irene
Offline

Junior Member

Posts: 1
Threads: 1
Joined: Aug 2010
Reputation: 0
#1
08-23-2010, 01:27 PM
Hi....I need your help; those who good with journal entries, kindly help

a) In May 2010, the company sold a machine to its subsidiary (for eg. $100) and treat the transaction as capital injection, hence journal entry created is
Dr. Investment $100
Cr. Internal Sales $100
Dr. Cost of Good Sold $100
Cr. Inventory $100

b) The machine has been shipped out to subsidiary and subsidiary has also taken into account with journal created
Dr. Assets
Cr. Share of Capital

c) However, up until today, the machine is still 'hanging' in subsidiary's country and they need time to clear the custom. Both party still cannot recognize and treat the transaction as capital injection due to custom clearance issues. Because August 2010 is the company financial closing year, I need to reverse journal entries created above.

My questions are
1. Is the journal entry created in item a) above is correct?
2. What entries to book the reverse journal? Is it Dr. Subsidiary Investment, Cr. Inventories?
3. Should I also reverse the entries of Dr. Sales, Cr. COGS?

Your help will be highly appreciated.

Thank you so much!

Best Regards,
Irene

« Next Oldest | Next Newest »

Users browsing this thread: 2 Guest(s)



  • View a Printable Version
  • Subscribe to this thread
Forum Jump:

Copyright 2002-2021 Accountancy. All rights reserved.

Linear Mode
Threaded Mode