上海对外经贸大学 高级财务会计学课件-高级财务会计学（英）5.Intercompany Profit Transactions – Inventories.pptxVIP

Chapter5

IntercompanyProfitTransactions–Inventories

IntercompanyProfits–Inventories:ObjectivesUnderstandtheimpactofintercompanyprofitininventoriesonpreparingconsolidationworkpapers.Applytheconceptsofupstreamversusdownstreaminventorytransfers.Deferunrealizedinventoryprofitsremainingintheendinginventory.Recognizerealized,previouslydeferred,inventoryprofitsinthebeginninginventory.

Objectives(cont.)Adjustnoncontrollinginterestamountsinthepresenceofintercompanyinventoryprofits.

1:IntercompanyInventoryTransactionIntercompanyProfitTransactions–Inventories

EliminationofIntercompanyPurchasesandSales(P146)PinCorporationformedasubsidiary,SepCorporation,in2011toretailaspeciallineofPin’smerchandise.AllSep’spurchasesaremadefromPinCorporationat20percentabovePin’scost.During2011,Pinsoldmerchandisethatcost$20,000toSepfor$24,000,andSepsoldallthemerchandisetoitscustomersfor$30,000.BothPinandSeprecordjournalentriesrelatingtothemerchandiseontheirseparatebooks,asfollows:

PIN’SBOOKSInventory(+A)20,000Accountspayable(+L)20,000Torecordpurchasesonaccountfromotherentries.Accountsreceivable----Sep(+A)24,000Sales(R,+SE)24,000TorecordintercompanysalestoSep.Costofsales(E,-SE)20,000Inventory(-A)20,000TorecordcostofsalestoSep.EliminationofIntercompanyPurchasesandSales(P146)

SEP’SBOOKSInventory(+A)24,000Accountspayable----Pin(+L)24,000TorecordintercompanypurchasesfromPin.Accountsreceivable(+A)30,000Sales(R,+SE)30,000Torecordsalestocustomersoutsidetheconsolidatedentity.Costofsales(E,-SE)24,000Inventory(-A)24,000Torecordcostofsalestocustomers.EliminationofIntercompanyPurchasesandSales(P147)

Atyear-end2011,Pin’ssalesinclude$24,000soldtoSep,anditscostofsalesincludesthe$20,000costofmerchandiset