USA AR/AP offset

[Calvinkwok]

I have tough decision to make as a controller. Here is the problem. We have 3 separate individual entities, A, B, and C. Lets say company A owes company B $200, and B owes company C $100. When company A has $200 cash to pay company B, it should be a very simple transaction between A and B. However, for whatever reason, on company B, it only show $100 AR from company A. Therefore, the owner wants company A to credit 200 cash and debit 200 AP, while in company B debit 100 cash and credit 100 AR. The remaining balance of the $100 company A pays, the owner wants A physically transfer the money to company C bank account. Then debit $100 cash and credit $100 AR IN COMPANY C's book. I dont think its right to do so. All suggestion and comments are welcome.

Thanks in advance.
Frustrated Controller.

 

[kirby]

Problem here is the entries proposed by Mr Genius owner are 1) wrong and 2) do not solve the problem.

Before the owner's proposed entries are posted, the combined total of intercompany due from accts (you call A/R) is 200 debit ($100 on B's books due from A and $100 on C's books due from B) . And the combined total of due to accts is 300 credit ($200 on A's books due to B and $100 on B's books due to C). So at some point in the past an incorrect entry had been posted recording an intercompany debit of $100 into the real books. To fix this, co b needs to dr due from A for $100 and cr misc income for $100. And now the world makes sense again.

The owner's entries intentionally mispost the gl accts (because A pays C when it does not need to) and that's not ok. Besides after owner's entries are posted you now have combined intercompany due from of zero and combined intercompany due to of $100 credit. Still out of balance - problem not resolved.

Oh brother....