Acca financial Accounting (FA) Study Text ac ca (FA)

Calculate the consolidated receivables and payables figures of P 

group as at 30 June 20X8. 

 

 

Solution to Illustration 8 

 

Receivables = $1,400 + $650 – 

$400

 = $1,650 

Payables = $2,800 + $1,300 – 

$400

 = $3,700 

 

 

Test your understanding 3 

 

Prepare the consolidated statement of financial position of P group, 

based on the preceding illustration, as at 30 June 20X8. 

11 Unrealised 

profits 

Profits made by members of a group on transactions with other group members 

are: 

•

 

recognised in the accounts of the individual entities concerned, but 

•

 

in terms of the group as a whole, such profits are unrealised and must be 

eliminated from the consolidated accounts (remember you cannot make 

profits if your right hand sells goods to your left!). 

Such unrealised profits arise when one group entity sells goods to another 

group entity and those goods have not yet been sold on externally by the end of 

the year. They are therefore known as unrealised profits held in inventory.