USA Eliminating Entry

[toddm8888]

Trying to consolidate the income statement for our companies. Not sure how much of COGS should be eliminated?
If revenue is $1,000,000 and COGS is $300,000 from product that we buy from our subsidiary, what amount gets
eliminated?

Thanks

 

[kirby]

You don't just eliminate one or the other amount. You have to eliminate the entire purchase and sale.
So for seller were the entries:
DR Cash $1MM
CR Sales $1MM

DR COGS 300K
CR Inventory 300K ???

and for buyer
DR Inventory $1MM
CR Cash $1MM

?? if not , what were the basic entries?

 

[toddm8888]

Yes, those were the original entries. So for the corporate office (the buyer) I would eliminate Sales of $1MM
and COGS of $300K ??

 

[kirby]

OK so your elimination entry is:

DR Sales $1MM
CR COGS $300K
CR Inventory $700K

I suggest you have folks add intercompany accounts to the chart of accts. That will make it easy to create the intercompany eliminations

 

[Triest123]

Trying to consolidate the income statement for our companies. Not sure how much of COGS should be eliminated?
If revenue is $1,000,000 and COGS is $300,000 from product that we buy from our subsidiary, what amount gets
eliminated?

Thanks

Do you mean that the holding company (H Ltd) purchase goods from its subsidiary (S Ltd) at $300,000. H Ltd and then sold those goods to outsiders for $1,000,000 ?