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General Accounting Discussions: combining balance sheets

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    • CommentAuthormarkw
    • CommentTimeJul 24th 2009
     
    I am confused on how to combine balance sheets. If one business owns another and there are notes due from one to the other you cannot simply add them together.
    Thankful People: mulalam
    • CommentAuthorpk
    • CommentTimeJul 25th 2009
     
    When the two balance sheets are combined, the inter-compnay items are to be eliminated.

    For example, Company A has a Receivable from Compnay B which means Company B has a Payable to Compnay A.
    When you combine (consolidate) the balance sheet, it will be as follows:

    Particulars CompanayA ComponayB Eliminations Total

    Accounts Receivable 250,000 100,000 (50,000) 300,000

    Accounts Payable 125,000 75,000 (50,000) 150,000

    Note: 50,000 represents inter-company receivable/payable

    Hope this clarifies your doubt.
    Thankful People: mulalam
    •  
      CommentAuthorania13
    • CommentTimeJul 25th 2009
     
    You should have a BS for each company separately and then one that's consolidated. I agree with the above response.

    PS. If you're interested in growing your business, click here to get a FREE video to learn how to do it with internet marketing.

    http://freevideo-accountants-.im-for.com/index1.php
    Thankful People: mulalam

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