Consolidated current assets and liabilities

hinanifaf · 03-09-2010, 08:54 PM

Good day dear members,
Q as follows
D LTD controls C LTD, owing 60% of its ordinary share capital.At groups year end, 31 December 2008, C included 6000 in its receivable i.r.o goods supplied to D.However, the payables of D included only 4000 i.r.o amounts due to C.The difference arose because , on 31 December 2008, D sent a cheque for 2000, which was not received by C until 3 January 2009.

Now on consolidation
Consolidated receivable will decrease by 6000
Consolidated payables will decrease by 4000
And my inventory in-transit will include 2000

Please comment on the above.
Many thanks
Flora

Fahim Sheikh · 03-10-2010, 02:21 PM

According to me

Not inventory

it will be treated as cash in transit and the same will be debited at the time of consolidation

Dard · 03-10-2010, 05:31 PM

It is cash in transit
Dr Cash 2000
Dr Payables 4000
Cr Recievables 6000

hinanifaf · 03-15-2010, 09:56 PM

I agree with you on that
Many Thanks
flora<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Dard
 It is cash in transit
Dr Cash 2000
Dr Payables 4000
Cr Recievables 6000
<hr height="1" noshade id="quote"></blockquote id="quote">