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H Limited a holding company made sales amounting to US$100,000/- to S Limited, it's subsidiary. S Limited still have 50% goods in stock.

Explain how these figures will be reported in consolidated financial statement of H Limited and S Limited respectively.

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Question added by Deleted user
Date Posted: 2014/09/03
Ismail Mamoojee
by Ismail Mamoojee , Group Compliance Officer , Liberty

On Consolidation the profit that H made on the remaining inventory would be eliminated

FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

IN H Limitted 

Sales value increase100,000 

Balance of customers  Increases100,000 

Inventory decreases by100,000 - profit

INS Limitted 

The value of purchases increase100,000

Balance of Increases100,000 creditors

Inventory Increases bb50000

Sales value increase50,000 + profit