Intercompany Transactions

Question 1

Types of Intercompany Transactions

Answer 1

1.- Intercompany debt
2.- Intercompany revenues and expenses
3.- Intercompany stock ownership

Question 2

Intercompany Transactions accounts balances

Answer 2

1.- Receivables & Payables
2.- Dividends
3.- Inventory
4.- Fixed assets
5.- Land
69.- Bonds payable

Question 3

Inventory transactions
What are we focusing on eliminating

Answer 3

Intercompany sales - Intercompany gross profit = Intercompany gross profit
None of the inventory was sold to third parties
All of the inventory was sold to third parties
some of the inventory was sold to third parties

Question 4

Inventory reversing entries

Answer 4

Sell not of it
We reverse inventory (Overstated)
Sell all of it
We reverse COGS (Overstated)
Sell part of it
We reverse inventory ( Pro rata)

Question 5

Intercompany sales and COGS

Answer 5

If all goods are sold not adjustment is necessary.
Sales and COGS should be reduced by the intraentity sales.