Hi All
While consolidation and elimination, i want to know which ledger accounts i have to consider in the "Elimination rule".
As per my scenario, consider the two Companies A and B, to track the inter-company orders i create the two ledger accounts for the payable and receivables, two accounts for the COGS and revenue. Now i create the PO from company B and the price is $120 so, once i create the PO the sales order created automatically. Now i proceed further and invoice the PO and the sales order which generate the inter-company receivables and payable of $120 to each other. The cost of the item in Company A is $100
Company A transaction:
Inventory A/C 100 Cr.
COGS 100 Dr.
Customer B 120 Dr.
Revenue 120 Cr.
Company B transaction:
Inventory A/C 120 Dr.
Vendor A 120 Cr.
Now the company B sales the item to third party with the price $150 and generate the invoice to it.
Company B transaction:
Inventory 120 Cr.
COGS 120 Dr.
Customer (3rd party) 150 Dr.
Revenue (3rd Party) 150 Cr.
Combined Company B transactions:
Vendor A 120 Cr.
COGS 120 Dr.
Customer (3rd party) 150 Dr.
Revenue (3rd Party) 150 Cr.
Now when i consolidate and eliminate, the inter-company receivables and payable will be zero as i in the elimination rule i select these two ledger accounts. Now i want to eliminate the Cost from the Company B and revenue from the company A, how i can eliminate the cost and revenue as the amounts in these ledger accounts will not be the equal as the COGS come when i invoice to the third party ans that ledger account (COGS) will consisting of the other sales also.
Please advise, thanks in advance.