Intragroup-journals - Summary of intragroup journals PDF

Preview

Summary

Summary of intragroup journals...

Description

CAS - Intragroup Journal Entries Dividend Payments If dividends have not been paid: 1. Dr Dividend payable Cr Dividend declared

→

2. Dr Dividend income Cr Dividend receivable

(Eliminate dividend declared).

(Eliminate dividend income).

If dividends have been paid: Dr Dividend income Cr Dividend paid

(Eliminate dividend income).

Sale of inventory - Unrealised Profit in Closing Inventory 1. Dr Sales Cr COGS

→

2. Dr COGS Cr Inventory

→

3. Dr DTA Cr Income tax expense

(Eliminate intragroup sales). (Eliminate unrealised profit closing inv.)

(Tax effect on previous jnl.)

Unrealised Profit in Opening Inventory 1. Dr Retained earnings Cr COGS

→

2. Dr Income tax expense Cr Retained earnings

(Eliminate unrealised profit in opening inv.)

(Tax effect on previous journal)

Sale of Non-Current Assets 1. Dr Gain on sale Dr Asset Cr Accumulated depreciation

→

2. Dr Deferred tax asset Cr Income tax expense

(To reverse gain/reinstate accumulated depreciation)

(Tax effect on previous journal)

3. Dr Accumulated depreciation Cr Depreciation expense

4. Dr Income tax expense Cr DTA

→

(To reverse “over-depreciation”)

(Tax effect on depreciation adjustment)

Intragroup Management Fees 1. Dr Management fee revenue Cr Management fee expense (Eliminate intragroup management fee)

→

2. Dr Management fee payable Cr Management fee receivable (Elim. intragroup mgmt. fee payable/receivable)

Intragroup Loans and Interest 1. Dr Loan payable → 2. Dr Interest revenue → 3. Dr Interest payable Cr Loan receivable Cr Interest expense Cr Interest receivable (Elim. intragroup loan) (Elim. IG loan int exp) (Elim. IG loan int payable/receivable)...